HOME Investment Partnerships Program 

Final Rule 

24 CFR Part 92 

September 16, 1996 

(updated through December 22, 2004 )
HOME Investment Partnerships 

Program Final Rule 

Table of Contents 

SUBPART A – GENERAL

92.1 Overview 1

92.2 Definitions 1

92.4 Waivers and Suspension of Requirements for Disaster Areas 8

SUBPART B – ALLOCATION FORMULA

92.50 Formula Allocation 9

92.60 Allocation Amounts for Insular Areas 11

92.61 Program Description 12

92.62 Review of Program Description and Certifications 13

92.63 Amendments to Program Description 14

92.64 Applicability of Requirements to Insular Areas 14

92.65 Funding Sanctions 15

92.66 Reallocation 15

SUBPART C – CONSORTIA; DESIGNATION AND REVOCATION OF 

DESIGNATION AS A PARTICIPATING JURISDICTION

92.100 [Reserved] 16

92.101 Consortia 16

92.102 Participation Threshold Amount 17

92.103 Notification of Intent to Participate 18

92.104 Submission of a Consolidated Plan 18

92.105 Designation as a Participating Jurisdiction 18

92.106 Continuous Designation as a Participating Jurisdiction 18

92.107 Revocation of Designation as a Participating Jurisdiction 19

SUBPART D – SUBMISSION REQUIREMENTS

92.150 Submission Requirements 19

SUBPART E –PROGRAM REQUIREMENTS

92.200 Private-public Partnership 19

92.201 Distribution of Assistance 19

92.202 Site and Neighborhood Standards 20

92.203 Income Determinations 21

92.204 Applicability of Requirements to Entities that Receive a Reallocation of HOME Funds, Other 

than Participating Jurisdictions 23
ELIGIBLE AND PROHIBITED ACTIVITIES 

92.205 Eligible Activities: General 24

92.206 Eligible Project Costs 25

92.207 Eligible Administrative and Planning Costs 28

92.208 Eligible Community Housing Development Organization (CHDO) Operating Expense and 

Capacity Building Costs 30

92.209 Tenant-based Rental Assistance: Eligible Costs and Requirements 31

92.212 Pre-award Costs 34

92.213 [Reserved] 34

92.214 Prohibited Activities 34

92.215 Limitation on Jurisdictions under Court Order 35

INCOME TARGETING

92.216 Income Targeting: Tenant-based Rental Assistance and Rental Units 35

92.217 Income Targeting: Homeownership 36

MATCHING CONTRIBUTION REQUIREMENT

92.218 Amount of Matching Contribution 36

92.219 Recognition of Matching Contribution 37

92.220 Form of Matching Contribution 38

92.221 Match Credit 42

92.222 Reduction of Matching Contribution Requirement 43

SUBPART F – PROJECT REQUIREMENTS

92.250 Maximum Per-unit Subsidy Amount and Subsidy Layering 45

92.251 Property Standards 45

92.252 Qualification as Affordable Housing: Rental Housing 47

92.253 Tenant and Participant Protections 50

92.254 Qualification as Affordable Housing: Homeownership 51

92.255 Converting Rental Units to Homeownership Units for Existing Tenants 57

92.256 Reserved 57

92.257 Religious Organizations 57

92.258 Elder Cottage Housing Opportunity (ECHO) Units 58

SUBPART G – COMMUNITY DEVELOPMENT HOUSING 

ORGANIZATIONS

92.300 Set-aside for Community Housing Development Organizations (CHDO) 59

92.301 Project-specific Assistance to Community Housing Development Organizations 60

92.302 Housing Education and Organizational Support 61

92.303 Tenant Participation Plan 62

SUBPART H – OTHER FEDERAL REQUIREMENTS

92.350 Other Federal Requirements 62

92.351 Affirmative Marketing; Minority Outreach Program 62

92.352 Environmental Review 63

92.353 Displacement, Relocation, and Acquisition 64
92.354 Labor 67

92.355 Lead-based paint 68

92.356 Conflict of Interest 68

92.357 Executive Order 12372 70

92.358 Consultant Activities 70

SUBPART I – TECHNICAL ASSISTANCE

92.400 Coordinated Federal Support for Housing Strategies 71

SUBPART J – REALLOCATIONS

92.450 General 71

92.451 Reallocation of HOME Funds from a Jurisdiction that Is Not Designated a Participating 

Jurisdiction or Has Its Designation Revoked 71

92.452 Reallocation of Community Housing Development Organization Set-aside 72

92.453 Criteria for Competitive Reallocations 72

92.454 Reallocations by Formula 73

SUBPART K – PROGRAM ADMINISTRATION

92.500 The HOME Investment Trust Fund 74

92.501 HOME Investment Partnership Agreement 75

92.502 Program Disbursement and Information System 75

92.503 Program Income, Repayments, and Recaptured Funds 77

92.504 Participating Jurisdiction Responsibilities; Written Agreements; On-site Inspection 78

92.505 Applicability of Uniform Administrative Requirements 84

92.506 Audit 84

92.507 Closeout 84

92.508 Recordkeeping 84

92.509 Performance Reports 90

SUBPART L – PERFORMANCE REVIEWS AND SANCTIONS

92.550 Performance Reviews 90

92.551 Corrective and Remedial Actions 91

92.552 Notice and Opportunity for Hearing; Sanctions 92

SUBPART M – AMERICAN DREAM DOWNPAYMENT INITIATIVE

92.600 Purpose 92

92.602 Eligible Activities 93

92.604 ADDI Allocation Formula 94

92.606 Reallocations 95

92.608 Consolidated Plan 95

92.610 Program Requirements 95

92.612 Project Requirements 96

92.614 Other Federal Requirements 96

92.616 Program Administration 97

92.618 Performance Reviews and Sanctions 98
SUBPART A – GENERAL 

§ 92.1 Overview 

This part implements the HOME Investment Partnerships Act (the HOME Investment 

Partnerships Program). 

In general, under the HOME Investment Partnerships Program, HUD allocates funds by 

formula among eligible State and local governments to strengthen public-private partnerships 

and to expand the supply of decent, safe, sanitary, and affordable housing, with primary 

attention to rental housing, for very low-income and low-income families. 

Generally, HOME funds must be matched by nonfederal resources. 

State and local governments that become participating jurisdictions may use HOME funds to 

carry out multi-year housing strategies through acquisition, rehabilitation, and new 

construction of housing, and tenant-based rental assistance. 

Participating jurisdictions may provide assistance in a number of eligible forms, including 

loans, advances, equity investments, interest subsidies and other forms of investment that 

HUD approves. 

§ 92.2 Definitions 

The terms 1937 Act, ALJ, Fair Housing Act, HUD, Indian Housing Authority (IHA), 

Public Housing Agency (PHA), and Secretary are defined in 24 CFR 5.100. 

Act means the HOME Investment Partnerships Act at title II of the Cranston-Gonzalez 

National Affordable Housing Act, as amended, 42 U.S.C. 12701 et seq. 

ADDI funds means funds made available under subpart M through allocations and 

reallocations. 

Adjusted income. See § 92.203. 

Annual income. See § 92.203. 

Certification shall have the meaning provided in section 104(21) of the Cranston-Gonzalez 

National Affordable Housing Act, as amended, 42 U.S.C. 12704. 

Commitment means 

1. The participating jurisdiction has executed a legally binding agreement with a State 

recipient, a subrecipient or a contractor to use a specific amount of HOME funds to 

produce affordable housing or provide tenant-based rental assistance; or has 

executed a written agreement reserving a specific amount of funds to a community 

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housing development organization; or has met the requirements to commit to a 

specific local project, as defined in paragraph (2), below. 

2. Commit to a specific local project, which means: 

i. If the project consists of rehabilitation or new construction (with or without 

acquisition) the participating jurisdiction (or State recipient or subrecipient) 

and project owner have executed a written legally binding agreement under 

which HOME assistance will be provided to the owner for an identifiable 

project under which construction can reasonably be expected to start within 

twelve months of the agreement date. If the project is owned by the 

participating jurisdiction or State recipient, the project has been set up in the 

disbursement and information system established by HUD, and construction 

can reasonably be expected to start within twelve months of the project set-up 

date. 

ii. 

A. If the project consists of acquisition of standard housing and the 

participating jurisdiction (or State recipient or subrecipient) is acquiring 

the property with HOME funds, the participating jurisdiction (or State 

recipient or subrecipient) and the property owner have executed a legally 

binding contract for sale of an identifiable property and the property title 

will be transferred to the participating jurisdiction (or State recipient or 

subrecipient) within six months of the date of the contract. 

B. If the project consists of acquisition of standard housing and the 

participating jurisdiction (or State recipient or subrecipient) is providing 

HOME funds to a family to acquire single family housing for 

homeownership or to a purchaser to acquire rental housing, the 

participating jurisdiction (or State recipient or subrecipient) and the 

family or purchaser have executed a written agreement under which 

HOME assistance will be provided for the purchase of the single family 

housing or rental housing and the property title will be transferred to the 

family or purchaser within six months of the agreement date. 

iii. If the project consists of tenant-based rental assistance, the participating 

jurisdiction (or State recipient, or subrecipient) has entered into a rental 

assistance contract with the owner or the tenant in accordance with the 

provisions of § 92.209. 

Community housing development organization means a private nonprofit organization that: 

1. Is organized under State or local laws; 

2. Has no part of its net earnings inuring to the benefit of any member, founder, 

contributor, or individual; 

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3. Is neither controlled by, nor under the direction of, individuals or entities seeking to 

derive profit or gain from the organization. A community housing development 

organization may be sponsored or created by a for-profit entity, but: 

i. The for-profit entity may not be an entity whose primary purpose is the 

development or management of housing, such as a builder, developer, or real 

estate management firm. 

ii. The for-profit entity may not have the right to appoint more than one-third of 

the membership of the organization’s governing body. Board members 

appointed by the for-profit entity may not appoint the remaining two-thirds of 

the board members; and 

iii. The community housing development organization must be free to contract for 

goods and services from vendors of its own choosing; 

4. Has a tax exemption ruling from the Internal Revenue Service under section 

501(c)(3) or (4) of the Internal Revenue Code of 1986 (26 CFR 1.501(C)(3)-1); 

5. Does not include a public body (including the participating jurisdiction). An 

organization that is State or locally chartered may qualify as a community housing 

development organization; however, the State or local government may not have the 

right to appoint more than one-third of the membership of the organization’s 

governing body and no more than one-third of the board members may be public 

officials or employees of the participating jurisdiction or State recipient. Board 

members appointed by the State or local government may not appoint the remaining 

two-thirds of the board members; 

6. Has standards of financial accountability that conform to 24 CFR 84.21, “Standards 

for Financial Management Systems;” 

7. Has among its purposes the provision of decent housing that is affordable to lowincome and moderate-income persons, as evidenced in its charter, articles of 

incorporation, resolutions or by-laws; 

8. Maintains accountability to low-income community residents by: 

i. Maintaining at least one-third of its governing board’s membership for 

residents of low-income neighborhoods, other low-income community 

residents, or elected representative of low-income neighborhood organizations. 

For urban areas, “community” may be a neighborhood or neighborhoods, city, 

county or metropolitan area; for rural areas, it may be a neighborhood or 

neighborhoods, town, village, county, or multi-county area (but not the entire 

State); and 

ii. Providing a formal process for low-income program beneficiaries to advise the 

organization in its decisions regarding the design, siting, development, and 

management of affordable housing; 

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9. Has a demonstrated capacity for carrying out activities assisted with HOME funds. 

An organization may satisfy this requirement by hiring experienced key staff 

members who have successfully completed similar projects, or a consultant with the 

same type of experience and a plan to train appropriate key staff members of the 

organization; and 

10. Has a history of serving the community within which housing to be assisted with 

HOME funds is to be located. In general, an organization must be able to show one 

year of serving the community before HOME funds are reserved for the 

organization. However, a newly created organization formed by local churches, 

service organizations or neighborhood organizations may meet this requirement by 

demonstrating that its parent organization has at least a year of serving the 

community. 

Displaced homemaker means an individual who: 

1. Is an adult; 

2. Has not worked full-time full-year in the labor force for a number of years but has, 

during such years, worked primarily without remuneration to care for the home and 

family; and 

3. Is unemployed or underemployed and is experiencing difficulty in obtaining or 

upgrading employment. 

Family has the same meaning given that term in 24 CFR 5.403. 

First-time homebuyer means an individual and his or her spouse who have not owned a home 

during the three-year period prior to purchase of a home with assistance under the American 

Dream Downpayment Initiative (ADDI) described in subpart M of this part. The term firsttime homebuyer also includes an individual who is a displaced homemaker or single parent, 

as those terms are defined in this section. 

HOME funds means funds made available under this part through allocations and 

reallocations, plus program income. 

Homeownership means ownership in fee simple title or a 99 year leasehold interest in a oneto four-unit dwelling or in a condominium unit, or equivalent form of ownership approved by 

HUD. The ownership interest may be subject only to the restrictions on resale required under 

§ 92.254(a); mortgages, deeds of trust, or other liens or instruments securing debt on the 

property as approved by the participating jurisdiction; or any other restrictions or 

encumbrances that do not impair the good and marketable nature of title to the ownership 

interest. For purposes of the insular areas, homeownership includes leases of 40 years or 

more. For purposes of housing located on trust or restricted Indian lands, homeownership 

includes leases of 50 years. The participating jurisdiction must determine whether or not 

ownership or membership in a cooperative or mutual housing project constitutes 

homeownership under State law. 

Household means one or more persons occupying a housing unit. 

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Housing includes manufactured housing and manufactured housing lots, permanent housing 

for disabled homeless persons, transitional housing, single-room occupancy housing, and 

group homes. Housing also includes elder cottage housing opportunity (ECHO) units that are 

small, free-standing, barrier-free, energy-efficient, removable, and designed to be installed 

adjacent to existing single-family dwellings. Housing does not include emergency shelters 

(including shelters for disaster victims) or facilities such as nursing homes, convalescent 

homes, hospitals, residential treatment facilities, correctional facilities and student 

dormitories. 

Insular areas means Guam, the Northern Mariana Islands, the United States Virgin Islands, 

and American Samoa. 

Jurisdiction means a State or unit of general local government. 

Low-income families means families whose annual incomes do not exceed 80 percent of the 

median income for the area, as determined by HUD with adjustments for smaller and larger 

families, except that HUD may establish income ceilings higher or lower than 80 percent of 

the median for the area on the basis of HUD findings that such variations are necessary 

because of prevailing levels of construction costs or fair market rents, or unusually high or 

low family incomes. 

Metropolitan city has the meaning given the term in 24 CFR 570.3. 

Neighborhood means a geographic location designated in comprehensive plans, ordinances, 

or other local documents as a neighborhood, village, or similar geographical designation that 

is within the boundary but does not encompass the entire area of a unit of general local 

government; except that if the unit of general local government has a population under 

25,000, the neighborhood may, but need not, encompass the entire area of a unit of general 

local government. 

Participating jurisdiction means a jurisdiction (as defined in this section) that has been so 

designated by HUD in accordance with § 92.105. 

Person with disabilities means a household composed of one or more persons, at least one of 

whom is an adult, who has a disability. 

1. A person is considered to have a disability if the person has a physical, mental, or 

emotional impairment that: 

i. Is expected to be of long-continued and indefinite duration; 

ii. Substantially impedes his or her ability to live independently; and 

iii. Is of such a nature that such ability could be improved by more suitable 

housing conditions. 

2. A person will also be considered to have a disability if he or she has a 

developmental disability, which is a severe, chronic disability that: 

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i. Is attributable to a mental or physical impairment or combination of mental 

and physical impairments; 

ii. Is manifested before the person attains age 22; 

iii. Is likely to continue indefinitely; 

iv. Results in substantial functional limitations in three or more of the following 

areas of major life activity: self-care, receptive and expressive language, 

learning, mobility, self-direction, capacity for independent living, and 

economic self-sufficiency; and 

v. Reflects the person’s need for a combination and sequence of special, 

interdisciplinary, or generic care, treatment, or other services that are of 

lifelong or extended duration and are individually planned and coordinated. 

Notwithstanding the preceding provisions of this definition, the term “person 

with disabilities” includes two or more persons with disabilities living 

together, one or more such persons living with another person who is 

determined to be important to their care or well-being, and the surviving 

member or members of any household described in the first sentence of this 

definition who were living, in a unit assisted with HOME funds, with the 

deceased member of the household at the time of his or her death. 

Program income means gross income received by the participating jurisdiction, State 

recipient, or a subrecipient directly generated from the use of HOME funds or matching 

contributions. When program income is generated by housing that is only partially assisted 

with HOME funds or matching funds, the income shall be prorated to reflect the percentage of 

HOME funds used. Program income includes, but is not limited to, the following: 

1. Proceeds from the disposition by sale or long-term lease of real property acquired, 

rehabilitated, or constructed with HOME funds or matching contributions; 

2. Gross income from the use or rental of real property, owned by the participating 

jurisdiction, State recipient, or a subrecipient, that was acquired, rehabilitated, or 

constructed, with HOME funds or matching contributions, less costs incidental to 

generation of the income; 

3. Payments of principal and interest on loans made using HOME funds or matching 

contributions; 

4. Proceeds from the sale of loans made with HOME funds or matching contributions; 

5. Proceeds from the sale of obligations secured by loans made with HOME funds or 

matching contributions; 

6. Interest earned on program income pending its disposition; and 

7. Any other interest or return on the investment permitted under § 92.205(b) of 

HOME funds or matching contributions. 

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Project means a site or sites together with any building (including a manufactured housing 

unit) or buildings located on the site(s) that are under common ownership, management, and 

financing and are to be assisted with HOME funds as a single undertaking under this part. The 

project includes all the activities associated with the site and building. For tenant-based rental 

assistance, project means assistance to one or more families. 

Project completion means that all necessary title transfer requirements and construction work 

have been performed; the project complies with the requirements of this part (including the 

property standards under § 92.251); the final drawdown has been disbursed for the project; 

and the project completion information has been entered in the disbursement and information 

system established by HUD. For tenant-based rental assistance, project completion means the 

final drawdown has been disbursed for the project. 

Reconstruction means the rebuilding, on the same lot, of housing standing on a site at the 

time of project commitment. The number of housing units on the lot may not be decreased or 

increased as part of a reconstruction project, but the number of rooms per unit may be 

increased or decreased. Reconstruction also includes replacing an existing substandard unit of 

manufactured housing with a new or standard unit of manufactured housing. Reconstruction is 

rehabilitation for purposes of this part. 

Single family housing means a one- to four-family residence, condominium unit, cooperative 

unit, combination of manufactured housing and lot, or manufactured housing lot. 

Single parent means an individual who: 

1. Is unmarried or legally separated from a spouse; and 

2. Has one or more minor children of whom the individual has custody or joint 

custody, or is pregnant. 

Single room occupancy (SRO) housing means housing (consisting of single room dwelling 

units) that is the primary residence of its occupant or occupants. The unit must contain either 

food preparation or sanitary facilities (and may contain both) if the project consists of new 

construction, conversion of non-residential space, or reconstruction. For acquisition or 

rehabilitation of an existing residential structure or hotel, neither food preparation nor sanitary 

facilities are required to be in the unit. If the units do not contain sanitary facilities, the 

building must contain sanitary facilities that are shared by tenants. 

State means any state of the United States, the District of Columbia, the Commonwealth of 

Puerto Rico, or any agency or instrumentality thereof that is established pursuant to 

legislation and designated by the chief executive officer to act on behalf of the state with 

regard to the provisions of this part; however, for purposes of the American Dream 

Downpayment Initiative (ADDI) described in subpart M of this part, the term “state” does not 

include the Commonwealth of Puerto Rico (except for FY2003 ADDI funds). 

State recipient. See § 92.201(b)(2). 

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Subrecipient means a public agency or nonprofit organization selected by the participating 

jurisdiction to administer all or a portion of the participating jurisdiction’s HOME program. A 

public agency or nonprofit organization that receives HOME funds solely as a developer or 

owner of housing is not a subrecipient. The participating jurisdiction’s selection of a 

subrecipient is not subject to the procurement procedures and requirements. 

Tenant-based rental assistance is a form of rental assistance in which the assisted tenant may 

move from a dwelling unit with a right to continued assistance. Tenant-based rental assistance 

under this part also includes security deposits for rental of dwelling units. 

Transitional housing means housing that: 

1. Is designed to provide housing and appropriate supportive services to persons, 

including (but not limited to) deinstitutionalized individuals with disabilities, 

homeless individuals with disabilities, and homeless families with children; and 

2. Has as its purpose facilitating the movement of individuals and families to 

independent living within a time period that is set by the participating jurisdiction or 

project owner before occupancy. 

Unit of general local government means a city, town, township, county, parish, village, or 

other general purpose political subdivision of a State; a consortium of such political 

subdivisions recognized by HUD in accordance with § 92.101; and any agency or 

instrumentality thereof that is established pursuant to legislation and designated by the chief 

executive to act on behalf of the jurisdiction with regard to provisions of this part. When a 

county is an urban county, the urban county is the unit of general local government for 

purposes of the HOME Investment Partnerships Program. 

Urban county has the meaning given the term in 24 CFR 570.3. 

Very low-income families means low-income families whose annual incomes do not exceed 

50 percent of the median family income for the area, as determined by HUD with adjustments 

for smaller and larger families, except that HUD may establish income ceilings higher or 

lower than 50 percent of the median for the area on the basis of HUD findings that such 

variations are necessary because of prevailing levels of construction costs or fair market rents, 

or unusually high or low family incomes. 

§ 92.4 Waivers and Suspension of Requirements for Disaster Areas 

HUD’s authority for waiver of regulations and for the suspension of requirements to address 

damage in a Presidentially declared disaster area is described in 24 CFR 5.110 and in section 

290 of the Act, respectively. 

 

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SUBPART B – ALLOCATION FORMULA 

§ 92.50 Formula Allocation 

a. Jurisdictions eligible for a formula allocation. HUD will provide allocations of funds in 

amounts determined by the formula described in this section to units of general local 

governments that, as of the end of the previous fiscal year, are metropolitan cities, urban 

counties, or consortia approved under § 92.101; and States. 

b. Amounts available for allocation; State and local share. The amount of funds that are 

available for allocation by the formula under this section is equal to the balance of funds 

remaining after reserving amounts for insular areas, housing education and 

organizational support, other support for State and local housing strategies, and other 

purposes authorized by Congress, in accordance with the Act and appropriations. 

c. Formula factors. The formula for determining allocations uses the following factors. The 

first and sixth factors are weighted 0.1; the other four factors are weighted 0.2. 

1. Vacancy-adjusted rental units where the household head is at or below the poverty 

level. These rental units are multiplied by the ratio of the national rental vacancy 

rate over a jurisdiction’s rental vacancy rate. 

2. Occupied rental units with at least one of four problems (overcrowding, incomplete 

kitchen facilities, incomplete plumbing, or high rent costs). Overcrowding is a 

condition that exists if there is more than one person per room occupying the unit. 

Incomplete kitchen facilities means the unit lacks a sink with running water, a 

range, or a refrigerator. Incomplete plumbing means the unit lacks hot and cold 

piped water, a flush toilet, or a bathtub or shower inside the unit for the exclusive 

use of the occupants of the unit. High rent costs occur when more than 30 percent of 

household income is used for rent. 

3. Rental units built before 1950 occupied by poor households. 

4. Rental units described in paragraph (c)(2) of this section multiplied by the ratio of 

the cost of producing housing for a jurisdiction divided by the national cost. 

5. Number of families at or below the poverty level. 

6. Population of a jurisdiction multiplied by a net per capita income (pci). To compute 

net pci for a jurisdiction or for the nation, the pci of a three person family at the 

poverty threshold is subtracted from the pci of the jurisdiction or of the nation. The 

index is constructed by dividing the national net pci by the net pci of a jurisdiction. 

d. Calculating formula allocations for units of general local government. 

1. Initial allocation amounts for units of general local government described in 

paragraph (a) of this section are determined by multiplying the sum of the shares of 

the six factors in paragraph (c) of this section by 60 percent of the amount available 

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under paragraph (b) of this section for formula allocation. The shares are the ratio of 

the weighted factor for each jurisdiction over the corresponding factor for the total 

for all of these units of general local government. 

2. If any of the initial amounts for such units of general local government in Puerto 

Rico exceeds twice the national average, on a per rental unit basis, that amount is 

capped at twice the national average. 

3. To determine the maximum number of units of general local government that 

receive a formula allocation, only one jurisdiction (the unit of general local 

government with the smallest allocation of HOME funds) is dropped from the pool 

of eligible jurisdictions on each successive recalculation, except that jurisdictions 

that are participating jurisdictions (other than consortia that fail to renew the 

membership of all of their member jurisdictions) are not dropped. Then the amount 

of funds available for units of general local government is redistributed to all others. 

This recalculation/redistribution continues until all remaining units of general local 

government receive an allocation of $500,000 or more or are participating 

jurisdictions. Only units of general local government which receive an allocation of 

$500,000 or more under the formula or which are participating jurisdictions will be 

awarded an allocation. In fiscal years in which Congress appropriates less than $1.5 

billion of HOME funds, $335,000 is substituted for $500,000. 

4. The allocation amounts determined under paragraph (d)(3) of this section are 

reduced by any amounts that are necessary to provide increased allocations to States 

that have no unit of general local government receiving a formula allocation (see 

paragraph (e)(4) of this section). These reductions are made on a pro rata basis, 

except that no unit of general local government allocation is reduced below 

$500,000 (or $335,000 in fiscal years in which Congress appropriates less than $1.5 

billion of HOME funds) and no participating jurisdiction allocation which is below 

this amount is reduced. 

e. Calculating formula allocations for States. 

1. Forty percent of the funds available for allocation under paragraph (b) of this 

section are allocated to States. The allocation amounts for States are calculated by 

determining initial amounts for each State, based on the sum of the shares of the six 

factors. For 20 percent of the funds to be allocated to States, the shares are the ratio 

of the weighted factor for the entire State over the corresponding factor for the total 

for all States. For 80 percent of the funds to be allocated to States, the shares are the 

ratio of the weighted factor for all units of general local government within the State 

that do not receive a formula allocation over the corresponding factor for the total 

for all States. 

2. If the initial amounts for Puerto Rico (based on either or both the 80 percent of 

funds or 20 percent of funds calculation) exceed twice the national average, on a per 

rental unit basis, each amount that exceeds the national average is capped at twice 

the national average, and the resultant funds are reallocated to other States on a 

prorata basis. 

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3. If the initial amounts when combined for any State are less than the $3,000,000, the 

allocation to that State is increased to the $3,000,000 and all other State allocations 

are reduced by an equal amount on a prorata basis, except that no State allocation is 

reduced below $3,000,000. 

4. The allocation amount for each State that has no unit of general local government 

within the State receiving an allocation under paragraph (d) of this section is 

increased by $500,000. Funds for this increase are derived from the funds available 

for units of general local government, inaccordance with paragraph (d)(4) of this 

section. 

§ 92.60 Allocation Amounts for Insular Areas 

a. Initial allocation amount for each insular area. The initial allocation amount for each 

insular area is determined based upon the insular area’s population and occupied rental 

units compared to all insular areas. 

b. Threshold requirements. The HUD Field Office shall review each insular area’s progress 

on outstanding allocations made under this section, based on the insular area’s 

performance report, the timeliness of close-outs, and compliance with fund management 

requirements and regulations, taking into consideration the size of the allocation and the 

degree and complexity of the program. If HUD determines from this review that the 

insular area does not have the capacity to administer effectively a new allocation, or a 

portion of a new allocation, in addition to allocations currently under administration, 

HUD may reduce the insular area’s initial allocation amount. 

c. Previous audit findings and outstanding monetary obligations. HUD shall not make an 

allocation to an insular area that has either an outstanding audit finding for any HUD 

program, or an outstanding monetary obligation to HUD that is in arrears, or for which a 

repayment schedule has not been established. This restriction does not apply if the HUD 

Field Office finds that the insular area has made a good faith effort to clear the audit and, 

when there is an outstanding monetary obligation to HUD, the insular area has made a 

satisfactory arrangement for repayment of the funds due HUD and payments are current. 

d. Increases to the initial allocation amount. If funds reserved for the insular areas are 

available because HUD has decreased the amount for one or more insular areas in 

accordance with paragraphs (b) or (c) of this section, or for any other reason, HUD may 

increase the allocation amount for one or more of the remaining insular areas based upon 

the insular area’s performance in committing HOME funds within the 24 month 

deadline, producing housing units described in its program description, and meeting 

HOME program requirements. Funds that become available but which are not used to 

increase the allocation amount for one or more of the remaining insular areas will be 

reallocated in accordance with § 92.66. 

e. Notice of allocation amounts. HUD will notify each insular area, in writing, as to the 

amount of its HOME allocation. 

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§ 92.61 Program Description 

a. Submission requirement. Not later than 90 days after HUD notifies the insular area of the 

amount of its allocation, the insular area must submit a program description and 

certifications to HUD. 

b. Content of program description. The program description must contain the following: 

1. An executed Standard Form 424; 

2. The estimated use of HOME funds and a description of projects and eligible 

activities, including number of units to be assisted, estimated costs, and tenure type 

(rental or owner occupied) and, for tenant assistance, number of households to be 

assisted; 

3. A timetable for the implementation of the projects or eligible activities; 

4. If the insular area intends to use HOME funds for homebuyers, the guidelines for 

resale or recapture as required in § 92.254(a)(5); 

5. If the insular area intends to use HOME funds for tenant-based rental assistance, a 

description of how the program will be administered consistent with the minimum 

guidelines described in § 92.209; 

6. If an insular area intends to use other forms of investment not described in 

§ 92.205(b), a description of the other forms of investment; 

7. A statement of the policy and procedures to be followed by the insular area to meet 

the requirements for affirmative marketing, and establishing and overseeing a 

minority and women business outreach program under § 92.351; 

8. If the insular intends to use HOME funds for refinancing along with rehabilitation, 

the insular area’s guidelines described in § 92.206(b). 

c. Certifications. The following certifications must accompany the program description: 

1. A certification that, before committing funds to a project, the insular area will 

evaluate the project in accordance with guidelines that it adopts for this purpose and 

will not invest any more HOME funds in combination with other governmental 

assistance than is necessary to provide affordable housing; 

2. If the insular area intends to provide tenant-based rental assistance, the certification 

required by § 92.209; 

3. A certification that the submission of the program description is authorized under 

applicable law and the insular area possesses the legal authority to carry out the 

HOME Investment Partnerships Program, in accordance with the HOME 

regulations; 

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4. A certification that it will comply with the acquisition and relocation requirements 

of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 

1970, as amended, implementing regulations at 49 CFR part 24 and the 

requirements of § 92.353; 

5. A certification that the insular area will use HOME funds in compliance with all 

requirements of this part; 

6. The certification with regard to the drug-free workplace required by 24 CFR part 24, 

subpart F; and 

7. The certification required with regard to lobbying required by 24 CFR part 87, 

together with disclosure forms, if required by 24 CFR part 87. 

§ 92.62 Review of Program Description and Certifications 

a. Review of program description. The responsible HUD Field Office will review an insular 

area’s program description and will approve the description unless the insular area has 

failed to submit information sufficient to allow HUD to make the necessary 

determinations required for § 92.61(b)(4), (b)(6), and (b)(7), or the guidelines under 

(b)(8) are not satisfactory to HUD, if applicable; or if the level of proposed projects or 

eligible activities is not within the management capability demonstrated by past 

performance in housing and community development programs. If the insular area has 

not submitted information on § 92.61(b)(4), (b)(6), and (b)(7), or the guidelines under 

(b)(8) are not satisfactory to HUD, if applicable; or if the level of proposed projects or 

eligible activities is not within the management capability demonstrated by past 

performance in housing and community development programs, the insular area may be 

required to furnish such further information or assurances as HUD may consider 

necessary to find the program description and certifications satisfactory. The HUD Field 

Office shall work with the insular area to achieve a complete and satisfactory program 

description. 

b. Review period. Within thirty days of receipt of the program description, the HUD Field 

Office will notify the insular area if determinations cannot be made under § 92.61(b)(4), 

(b)(6), (b)(7), or (b)(8) with the supporting information submitted, or if the proposed 

projects or activities are beyond currently demonstrated capability. The insular area will 

have a reasonable period of time, agreed upon mutually, to submit the necessary 

supporting information or to revise the proposed projects or activities in its program 

description. 

c. HOME Investment Partnership Agreement. After HUD Field Office approval under this 

section, a HOME funds allocation is made by HUD execution of the agreement, subject 

to execution by the insular area. The funds are obligated on the date HUD notifies the 

insular area of HUD’s execution of the agreement. 

 

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§ 92.63 Amendments to Program Description 

An insular area must submit to HUD for approval any substantial change in its HUDapproved program description that it makes and must document any other changes in its file. 

A substantial change involves a change in the guidelines for resale or recapture 

(§ 92.61(b)(4)), other forms of investment (§ 92.61(b)(6)), minority and women business 

outreach program (§ 92.61(b)(7)) or refinancing (§ 92.61(b)(8)); or a change in the tenure 

type of the project or activities; or a funding increase to a project or activity of $100,000 or 

50% (whichever is greater). 

The HUD Field Office will notify the insular area if its program description, as amended, does 

not permit determinations to be made under § 92.61(b)(4), (b)(6), (b)(7), or (b)(8), or if the 

level of proposed projects or eligible activities is not within the management capability 

demonstrated by past performance in housing and community development programs, within 

30 days of receipt. 

The insular area will have a reasonable period of time, agreed upon mutually, to submit the 

necessary supporting information to revise the proposed projects or activities in its program 

description. 

§ 92.64 Applicability of Requirements to Insular Areas 

a. Insular areas are subject to the same requirements in subpart E (Program Requirements), 

subpart F (Project Requirements), subpart K (Program Administration), and subpart L 

(Performance Reviews and Sanctions) of this part as participating jurisdictions, except 

for the following. 

1. Subpart E (Program Requirements): Administrative costs, as described in § 92.207, 

are eligible costs for insular areas in an amount not to exceed 15 percent of the 

HOME funds provided to the insular area. The matching contribution requirements 

in this part do not apply. 

2. Subpart K (Program Administration): 

i. Section 92.500 (The HOME Investment Trust Fund) does not apply. HUD will 

establish a HOME account in the United States Treasury for each insular area 

and the HOME funds must be used for approved activities. A local account 

must be established for program income. Each insular area may use either a 

separate local HOME account or a subsidiary account within its general fund 

(or other appropriate fund) as the local HOME account. HUD will recapture 

HOME funds in the HOME Treasury account by the amount of: 

A. Any funds that are not committed within 24 months after the last day of 

the month in which HUD notifies the insular area of HUD’s execution of 

the HOME Investment Partnership Agreement; 

B. Any funds that are not expended within five years after the last day of the 

month in which HUD notifies the insular area of HUD’s execution of the 

HOME Investment Partnership Agreement; and 

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C. Any penalties assessed by HUD under § 92.552. 

ii. Section 92.502 (Program disbursement and information system) applies, 

except that references to the HOME Investment Trust Fund mean HOME 

account. In addition, § 92.502( c) does not apply, and instead compliance with 

Treasury Circular No. 1075 (31 CFR part 205) and 24 CFR 85.21 is required. 

iii. Section 92.503 (Program income, repayments, and recaptured funds) applies, 

except that the funds may be retained provided the funds are used for eligible 

activities in accordance with the requirements of this section. 

3. Section 92.504 (Participating jurisdiction responsibilities; written agreements; onsite inspections) applies, except that the written agreement must ensure compliance 

with the requirements in this section. 

4. Section 92.508 (Recordkeeping) applies with respect to the records that relate to the 

requirements of this section. 

5. Section 92.509 (Performance reports) applies, except that a performance report is 

required for the fiscal year allocation only after completion of the approved projects 

funded by the allocation. 

6. Subpart L (Performance Reviews and Sanctions): Section 92.552 does not apply. 

Instead, § 92.65 applies. 

b. The requirements of subpart H (Other Federal Requirements) of this part apply as 

follows: § 92.357 Executive Order 12372 applies as written, and the requirements of the 

remaining sections which apply to participating jurisdictions are applicable to the insular 

areas. 

c. Subpart B (Allocation Formula), subpart C (Consortia; Designation and Revocation as a 

Participating Jurisdiction), subpart D (Submission Requirements), and subpart G 

(Community Housing Development Organizations) of this part do not apply. 

d. Subpart A (General) applies, except that for the definitions of commitment, program

income, and subrecipient, “participating jurisdiction” means “insular area.” 

§ 92.65 Funding Sanctions 

Following notice and opportunity for informal consultation, HUD may withhold, reduce or 

terminate the assistance where any corrective or remedial actions taken under § 92.551 fail to 

remedy an insular area’s performance deficiencies, and the deficiencies are sufficiently 

substantial, in the judgment of HUD, to warrant sanctions. 

§ 92.66 Reallocation 

Any HOME funds which are reduced or recaptured from an insular area’s allocation and 

which are not used to increase the allocation amount for one or more of the remaining insular 

areas as provided in § 92.60 of this part, will be reallocated by HUD to the States in 

15
accordance with the requirements in subpart J for reallocating funds initially allocated to a 

State. 

SUBPART C – CONSORTIA; DESIGNATION AND 

REVOCATION OF DESIGNATION AS A PARTICIPATING 

JURISDICTION 

§ 92.100 [Reserved] 

§ 92.101 Consortia 

a. A consortium of geographically contiguous units of general local government is a unit of 

general local government for purposes of this part if the requirements of this section are 

met. 

1. One or more members of a proposed consortium or an existing consortium whose 

consortium qualification terminates at the end of the fiscal year, must provide 

written notification to the HUD Field Office of its intent to participate as a 

consortium in the HOME Program for the following fiscal year. HUD shall 

establish the deadline for this submission. 

2. The proposed consortium must provide, at such time and in a manner and form 

prescribed by HUD, the qualification documents, which will include submission of: 

i. A written certification by the State that the consortium will direct its activities 

to alleviation of housing problems within the State; and 

ii. Documentation which demonstrates that the consortium has executed one 

legally binding cooperation agreement among its members authorizing one 

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

all member units of general local government for the purposes of this part and 

providing that the representative member assumes overall responsibility for 

ensuring that the consortium’s HOME Program is carried out in compliance 

with the requirements of this part. 

3. Before the end of the fiscal year in which the notice of intent and documentation are 

submitted, HUD must determine that a proposed consortium has sufficient authority 

and administrative capability to carry out the purposes of this part on behalf of its 

member jurisdictions. HUD will endeavor to make its determination as quickly as 

practicable after receiving the consortium’s documentation in order to provide the 

consortium an opportunity to correct its submission, if necessary. If the submission 

is deficient, HUD will work with the consortium to resolve the issue, but will not 

delay the formula allocations. HUD, at its discretion, may review the performance 

of an existing consortium that wishes to requalify to determine whether it continues 

to have sufficient authority and administrative capacity to successfully administer 

the program. 

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b. A metropolitan city or an urban county may be a member of a consortium. A unit of 

general local government that is included in an urban county may be part of a 

consortium, only if the urban county joins the consortium. The included local 

government cannot join the consortium except through participation in the urban county. 

c. A non-urban county may be a member of a consortium. However, the county cannot on 

its own include the whole county in the consortium. A unit of local government located 

within the non-urban county that wishes to participate as a member of the consortium 

must sign the HOME consortium agreement. 

d. If the representative unit of general local government distributes HOME funds to 

member units of general local government, the representative unit is responsible for 

applying to the member units of general local government the same requirements as are 

applicable to subrecipients. 

e. The consortium’s qualification as a unit of general local government continues for a 

period of three successive Federal fiscal years, or until HUD revokes its designation as a 

participating jurisdiction, or until an urban county member fails to requalify under the 

CDBG program as an urban county for a fiscal year included in the consortium’s 

qualification period, or the consortium fails to receive a HOME allocation for the first 

Federal fiscal year of the consortium’s qualification period and does not request to be 

considered to receive a HOME allocation in each of the subsequent two years. However, 

if a member urban county’s three year CDBG qualification cycle is not the same as the 

consortium, the consortium may elect a shorter qualification period than three years to 

synchronize with the urban county’s qualification period. During the period of 

qualification, additional units of general local government may join the consortium, but 

no included unit of general local government may withdraw from the consortium. See 24 

CFR part 91, subpart E, for consolidated plan requirements for consortia, including the 

requirement that all members of the consortia must be on the same program year. 

f. The consortium agreement may, at the option of its member units of general local 

government, contain a provision that authorizes automatic renewals for the successive 

qualification period of three Federal fiscal years. The provision authorizing automatic 

renewal must require the lead consortium member to give the consortium members 

written notice of their right to elect not to continue participation for the new qualification 

period. 

§ 92.102 Participation Threshold Amount 

a. To be eligible to become a participating jurisdiction, a unit of general local government 

must have a formula allocation under § 92.50 that is equal to or greater than $750,000; or 

b. If a unit of general local government’s formula allocation is less than $750,000, HUD 

must find: 

1. The unit of general local government has a local PHA and has demonstrated a 

capacity to carry out the provisions of this part, as evidenced by satisfactory 

performance under one or more HUD-administered programs that provide 

assistance for activities comparable to the eligible activities under this part; and 

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2. 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. 

c. In fiscal years in which Congress appropriates less than $1.5 billion for this part, 

$500,000 is substituted for $750,000 each time it appears in this section. 

§ 92.103 Notification of Intent to Participate 

a. Not later than 30 days after receiving notice of its formula allocation amount, a 

jurisdiction must notify HUD in writing of its intention to become a participating 

jurisdiction. 

b. A unit of general local government that has a formula allocation of less than $750,000, or 

less than $500,000 in fiscal years in which Congress appropriates less than $1.5 billion 

for this part, must submit, with its notice, one or more of the following, as appropriate, as 

evidence that it has met the threshold allocation requirements in § 92.102(b): 

1. Authorization from the State to transfer a portion of its allocation to the unit of 

general local government; 

2. A letter from the governor or designee indicating that the required funds have been 

approved and budgeted for the unit of general local government; 

3. A letter from the chief executive officer of the unit of general local government 

indicating that the required funds have been approved and budgeted. 

§ 92.104 Submission of a Consolidated Plan 

A jurisdiction that has not submitted a consolidated plan to HUD must submit to HUD, not 

later than 90 days after providing notification under § 92.103, a consolidated plan in 

accordance with 24 CFR part 91. 

§ 92.105 Designation as a Participating Jurisdiction 

When a jurisdiction has complied with the requirements of §§ 92.102 through 92.104 and 

HUD has approved the jurisdiction’s consolidated plan in accordance with 24 CFR part 91, 

HUD will designate the jurisdiction as a participating jurisdiction. 

§ 92.106 Continuous Designation as a Participating Jurisdiction 

Once a State or unit of general local government is designated a participating jurisdiction, it 

remains a participating jurisdiction for subsequent fiscal years and the requirements of 

§§ 92.102 through 92.105 do not apply, unless HUD revokes the designation in accordance 

with § 92.107. 

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§ 92.107 Revocation of Designation as a Participating Jurisdiction 

HUD may revoke a jurisdiction’s designation as a participating jurisdiction if: 

a. HUD finds, after reasonable notice and opportunity for hearing as provided in 

§ 92.552(b) that the jurisdiction is unwilling or unable to carry out the provisions of this 

part, including failure to meet matching contribution requirements; or 

b. The jurisdiction’s formula allocation falls below $750,000 (or below $500,000 in fiscal 

years in which Congress appropriates less than $1.5 billion for this part) for three 

consecutive years, below $625,000 (or below $410,000 in fiscal years in which Congress 

appropriates less than $1.5 billion for this part) for two consecutive years, or the 

jurisdiction does not receive a formula allocation in any one year. 

c. When HUD revokes a participating jurisdiction’s designation as a participating 

jurisdiction, HUD will reallocate any remaining funds in the jurisdiction’s HOME 

Investment Trust Fund established under § 92.500 in accordance with § 92.451. 

SUBPART D – SUBMISSION REQUIREMENTS 

§ 92.150 Submission Requirements 

In order to receive its HOME allocation, a participating jurisdiction must submit a 

consolidated plan in accordance with 24 CFR part 91. That part includes requirements for the 

content of the consolidated plan, the process of developing the consolidated plan, including 

citizen participation, the submission date, HUD approval, and amendments. 

SUBPART E – PROGRAM REQUIREMENTS 

§ 92.200 Private-public Partnership 

Each participating jurisdiction must make all reasonable efforts to maximize participation by 

the private sector in accordance with section 221 of the Act. 

§ 92.201 Distribution of Assistance 

a. Local. 

1. Each local participating jurisdiction must, insofar as is feasible, distribute HOME 

funds geographically within its boundaries and among different categories of 

housing need, according to the priorities of housing need identified in its approved 

consolidated plan. 

2. The participating jurisdiction may only invest its HOME funds in eligible projects 

within its boundaries, or in joint projects within the boundaries of contiguous local 

jurisdictions which serve residents from both jurisdictions. 

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b. State. 

1. Each State participating jurisdiction is responsible for distributing HOME funds 

throughout the State according to the State’s assessment of the geographical 

distribution of the housing needs within the State, as identified in the State’s 

approved consolidated plan. The State must distribute HOME funds to rural areas in 

amounts that take into account the non-metropolitan share of the State’s total 

population and objective measures of rural housing need, such as poverty and 

substandard housing, as set forth in the State’s approved consolidated plan. To the 

extent the need is within the boundaries of a participating unit of general local 

government, the State and the unit of general local government shall coordinate 

activities to address that need. 

2. A State may carry out its own HOME program without active participation of units 

of general local government or may distribute HOME funds to units of general local 

government to carry out HOME programs in which both the State and all or some of 

the units of general local government perform specified program functions. A unit 

of general local government designated by a State to receive HOME funds from a 

State is a State recipient. 

3. 

i. A State that uses State recipients to perform program functions shall ensure 

that the State recipients use HOME funds in accordance with the requirements 

of this part and other applicable laws. The State may require the State recipient 

to comply with requirements established by the State or may permit the State 

recipient to establish its own requirements to comply with this part. 

ii. The State shall conduct such reviews and audit of its State recipients as may be 

necessary or appropriate to determine whether the State recipient has 

committed and expended the HOME funds in the United States Treasury 

account as required by § 92.500, and has met the requirements of this part, 

particularly eligible activities, income targeting, affordability, and matching 

contribution requirements. 

4. A State and local participating jurisdiction may jointly fund a project within the 

boundaries of the local participating jurisdiction. The State may provide the HOME 

funds to the project or it may provide the HOME funds to the local participating 

jurisdiction to fund the project. 

5. A State may fund projects on Indian reservations located within the State provided 

that the State includes Indian reservations in its consolidated plan. 

§ 92.202 Site and Neighborhood Standards 

a. General. A participating jurisdiction must administer its HOME program in a manner 

that provides housing that is suitable from the standpoint of facilitating and furthering 

full compliance with the applicable provisions of title VI of the Civil Rights Act of 1964 

(42 U.S.C. 2000d-2000d-4), the Fair Housing Act (42 U.S.C. 3601 et seq.), E.O. 11063 

20
(3 CFR, 1959-1963 Comp., p. 652), and HUD regulations issued pursuant thereto; and 

promotes greater choice of housing opportunities. 

b. New rental housing. In carrying out the site and neighborhood requirements with respect 

to new construction of rental housing, a participating jurisdiction is responsible for 

making the determination that proposed sites for new construction meet the requirements 

in 24 CFR 983.6(b). 

§ 92.203 Income Determinations 

a. The HOME program has income targeting requirements for the HOME program and for 

HOME projects. Therefore, the participating jurisdiction must determine each family is 

income eligible by determining the family’s annual income. 

1. For families who are tenants in HOME-assisted housing and not receiving HOME 

tenant-based rental assistance, the participating jurisdiction must initially determine 

annual income using the method in paragraph (a)(1)(i) of this section. For 

subsequent income determinations during the period of affordability, the 

participating jurisdiction may use any one of the following methods in accordance 

with § 92.252(h): 

i. Examine the source documents evidencing annual income (e.g., wage 

statement, interest statement, unemployment compensation statement) for the 

family. 

ii. Obtain from the family a written statement of the amount of the family’s 

annual income and family size, along with a certification that the information 

is complete and accurate. The certification must state that the family will 

provide source documents upon request. 

iii. Obtain a written statement from the administrator of a government program 

under which the family receives benefits and which examines each year the 

annual income of the family. The statement must indicate the tenant’s family 

size and state the amount of the family’s annual income; or alternatively, the 

statement must indicate the current dollar limit for very low- or low-income 

families for the family size of the tenant and state that the tenant’s annual 

income does not exceed this limit. 

2. For all other families, the participating jurisdiction must determine annual income 

by examining the source documents evidencing annual income (e.g., wage 

statement, interest statement, unemployment compensation statement) for the 

family. 

b. When determining whether a family is income eligible, the participating jurisdiction 

must use one of the following three definitions of “annual income’’: 

1. “Annual income’’ as defined at 24 CFR 5.609 (except when determining the income 

of a homeowner for an owner-occupied rehabilitation project, the value of the 

homeowner’s principal residence may be excluded from the calculation of Net 

Family Assets); or 

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2. Annual Income as reported under the Census long-form for the most recent 

available decennial Census. This definition includes: 

i. Wages, salaries, tips, commissions, etc.; 

ii. Self-employment income from owned non-farm business, including 

proprietorships and partnerships; 

iii. Farm self-employment income; 

iv. Interest, dividends, net rental income, or income from estates or trusts; 

v. Social Security or railroad retirement; 

vi. Supplemental Security Income, Aid to Families with Dependent Children, or 

other public assistance or public welfare programs; 

vii. Retirement, survivor, or disability pensions; and 

viii. Any other sources of income received regularly, including Veterans’ (VA) 

payments, unemployment compensation, and alimony; or 

3. Adjusted gross income as defined for purposes of reporting under Internal Revenue 

Service (IRS) Form 1040 series for individual Federal annual income tax purposes. 

c. Although the participating jurisdiction may use any of the three definitions of “annual 

income’’ permitted in paragraph (b) of this section, to calculate adjusted income it must 

apply exclusions from income established at 24 CFR 5.611. The HOME rents for very 

low-income families established under § 92.252(b)(2) are based on adjusted income. In 

addition, the participating jurisdiction may base the amount of tenant-based rental 

assistance on the adjusted income of the family. 

d. 

1. The participating jurisdiction must calculate the annual income of the family by 

projecting the prevailing rate of income of the family at the time the participating 

jurisdiction determines that the family is income eligible. Annual income shall 

include income from all family members. Income or asset enhancement derived 

from the HOME-assisted project shall not be considered in calculating annual 

income. 

2. The participating jurisdiction is not required to re-examine the family’s income at 

the time the HOME assistance is provided, unless more than six months has elapsed 

since the participating jurisdiction determined that the family qualified as income 

eligible. 

3. The participating jurisdiction must follow the requirements in § 5.617 when making 

subsequent income determinations of persons with disabilities who are tenants in 

HOME-assisted rental housing or who receive tenant-based rental assistance. 

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§ 92.204 Applicability of Requirements to Entities that Receive a Reallocation of 

HOME Funds, Other than Participating Jurisdictions 

a. Jurisdictions other than participating jurisdictions and community housing development 

organizations receiving competitive reallocations from HUD are subject to the same 

requirements in subpart E (Program Requirements), subpart F (Project Requirements), 

subpart K (Program Administration), and subpart L (Performance Reviews and 

Sanctions) of this part as participating jurisdictions, except for the following: 

1. Subpart E (Program Requirements): the matching contribution requirements in 

§ 92.218 through § 92.221 do not apply. 

2. Subpart K (Program Administration): 

i. Section 92.500 (The HOME Investment Trust Fund) does not apply. HUD will 

establish a HOME account in the United States Treasury and the HOME funds 

must be used for approved activities. A local account must be established for 

program income. HUD will recapture HOME funds in the HOME Treasury 

account by the amount of: 

A. Any funds that are not committed within 24 months after the last day of 

the month in which HUD notifies the entity of HUD’s execution of the 

HOME Investment Partnership Agreement; 

B. Any funds that are not expended within five years after the last day of the 

month in which HUD notifies the entity of HUD’s execution of the 

HOME Investment Partnership Agreement; and 

C. Any penalties assessed by HUD under § 92.552. 

ii. Section 92.502 (Program disbursement and information system) applies, 

except that references to the HOME Investment Trust Fund mean HOME 

account and the reference to 24 CFR part 58 does not apply. In addition, 

§ 92.502(c) does not apply, and instead, compliance with Treasury Circular 

No. 1075 (31 CFR part 205) and 24 CFR 85.21 is required. 

iii. Section 92.503 (Program income, repayments, and recaptured funds) applies, 

except that program income may be retained provided the funds are used for 

eligible activities in accordance with the requirements of this section. 

3. Section 92.504 (Participating jurisdiction responsibilities; written agreements; onsite inspections) applies, except that the written agreement must ensure compliance 

with the requirements in this section. 

4. Section 92.508 (Recordkeeping) applies with respect to the records that relate to the 

requirements of this section. 

5. Section 92.509 (Performance reports) applies, except that a performance report is 

required only after completion of the approved projects. 

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b. The requirements in subpart H (Other Federal Requirements) of this part apply as 

written, except that jurisdictions and community housing development organizations 

receiving reallocations from HUD must comply with affirmative marketing 

requirements, labor requirements, and lead-based paint requirements, applicable to 

participating jurisdictions. 

c. Subpart B (Allocation Formula), subpart C (Consortia; Designation and Revocation of 

Designation as a Participating Jurisdiction), and subpart G (Community Housing 

Development Organizations) of this part do not apply. 

d. Subpart A (General) applies, except that for the definitions of commitment, program

income, and subrecipient, “participating jurisdiction’’ means jurisdiction or community 

housing development organization receiving the competitive reallocation. 

ELIGIBLE AND PROHIBITED ACTIVITIES 

§ 92.205 Eligible Activities: General 

a. Eligible activities. 

1. HOME funds may be used by a participating jurisdiction to provide incentives to 

develop and support affordable rental housing and homeownership affordability 

through the acquisition (including assistance to homebuyers), new construction, 

reconstruction, or rehabilitation of non-luxury housing with suitable amenities, 

including real property acquisition, site improvements, conversion, demolition, and 

other expenses, including financing costs, relocation expenses of any displaced 

persons, families, businesses, or organizations; to provide tenant-based rental 

assistance, including security deposits; to provide payment of reasonable 

administrative and planning costs; and to provide for the payment of operating 

expenses of community housing development organizations. The housing must be 

permanent or transitional housing. The specific eligible costs for these activities are 

set forth in §§ 92.206 through 92.209. 

2. Acquisition of vacant land or demolition must be undertaken only with respect to a 

particular housing project intended to provide affordable housing. 

3. Conversion of an existing structure to affordable housing is rehabilitation, unless the 

conversion entails adding one or more units beyond the existing walls, in which 

case, the project is new construction for purposes of this part. 

4. Manufactured housing. HOME funds may be used to purchase and/or rehabilitate a 

manufactured housing unit, or purchase the land upon which a manufactured 

housing unit is located. Except for existing, owner-occupied manufactured housing 

that is rehabilitated with HOME funds, the manufactured housing unit must, at the 

time of project completion, be connected to permanent utility hook-ups and be 

located on land that is owned by the manufactured housing unit owner or land for 

which the manufactured housing owner has a lease for a period at least equal to the 

applicable period of affordability. 

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b. Forms of assistance. 

1. A participating jurisdiction may invest HOME funds as equity investments, interestbearing loans or advances, non-interest-bearing loans or advances, interest subsidies 

consistent with the purposes of this part, deferred payment loans, grants, or other 

forms of assistance that HUD determines to be consistent with the purposes of this 

part. Each participating jurisdiction has the right to establish the terms of assistance, 

subject to the requirements of this part. 

2. A participating jurisdiction may invest HOME funds to guarantee loans made by 

lenders and, if required, the participating jurisdiction may establish a loan guarantee 

account with HOME funds. The HOME funds may be used to guarantee the timely 

payment of principal and interest or payment of the outstanding principal and 

interest upon foreclosure of the loan. The amount of the loan guarantee account 

must be based on a reasonable estimate of the default rate on the guaranteed loans, 

but under no circumstances may the amount on deposit exceed 20 percent of the 

total outstanding principal amount guaranteed; except that the account may include 

a reasonable minimum balance. While loan funds guaranteed with HOME funds are 

subject to all HOME requirements, funds which are used to repay the guaranteed 

loans are not. 

c. Minimum amount of assistance. The minimum amount of HOME funds that must be 

invested in a project involving rental housing or homeownership is $1,000 times the 

number of HOME-assisted units in the project. 

d. Multi-unit projects. HOME funds may be used to assist one or more housing units in a 

multi-unit project. Only the actual HOME eligible development costs of the assisted 

units may be charged to the HOME program. If the assisted and non-assisted units are 

not comparable, the actual costs may be determined based on a method of cost 

allocation. If the assisted and non-assisted units are comparable in terms of size, features 

and number of bedrooms, the actual cost of the HOME-assisted units can be determined 

by pro-rating the total HOME eligible development costs of the project so that the 

proportion of the total development costs charged to the HOME program does not 

exceed the proportion of the HOME-assisted units in the project. 

e. Terminated projects. A HOME assisted project that is terminated before completion, 

either voluntarily or otherwise, constitutes an ineligible activity and any HOME funds 

invested in the project must be repaid to the participating jurisdiction’s HOME 

Investment Trust Fund in accordance with § 92.503(b) (except for project-specific 

assistance to community housing development organizations as provided in 

§ 92.301(a)(3) and § 92.301(b)(3)). 

§ 92.206 Eligible Project Costs 

HOME funds may be used to pay the following eligible costs: 

a. Development hard costs. The actual cost of constructing or rehabilitating housing. These 

costs include the following: 

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1. For new construction, costs to meet the applicable new construction standards of the 

participating jurisdiction and the Model Energy Code referred to in § 92.251; 

2. For rehabilitation, costs: 

i. To meet the property standards in § 92.251; 

ii. To make essential improvements, including energy-related repairs or 

improvements, improvements necessary to permit use by persons with 

disabilities, and the abatement of lead-based paint hazards, as required by part 

35 of this title. 

3. For both new construction and rehabilitation, costs: 

i. To demolish existing structures; 

ii. To make utility connections including off-site connections from the property 

line to the adjacent street; and 

iii. To make improvements to the project site that are in keeping with 

improvements of surrounding, standard projects. Site improvements may 

include on-site roads and sewer and water lines necessary to the development 

of the project. The project site is the property, owned by the project owner, 

upon which the project is located. 

4. For both new construction and rehabilitation of multifamily rental housing, costs to 

construct or rehabilitate laundry and community facilities which are located within 

the same building as the housing and which are for the use of the project residents 

and their guests. 

5. Costs to make utility connections or to make improvements to the project site, in 

accordance with the provisions of § 92.206(a)(3)(ii) and (iii) are also eligible in 

connection with acquisition of standard housing. 

b. Refinancing costs. The cost to refinance existing debt secured by housing that is being 

rehabilitated with HOME funds: 

1. For single-family (1- to 4-family) owner-occupied housing when loaning HOME 

funds to rehabilitate the housing, if the refinancing is necessary to reduce the overall 

housing costs to the borrower and make the housing more affordable. 

2. For multifamily projects, when loaning HOME funds to rehabilitate the units if 

refinancing is necessary to permit or continue affordability under § 92.252. The 

participating jurisdiction must establish refinancing guidelines and state them in its 

consolidated plan described in 24 CFR part 91. Regardless of the amount of HOME 

funds invested, the minimum affordability period shall be 15 years. The guidelines 

shall describe the conditions under which the participating jurisdictions will 

refinance existing debt. At minimum, the guidelines must: 

26
i. Demonstrate that rehabilitation is the primary eligible activity and ensure that 

this requirement is met by establishing a minimum level of rehabilitation per 

unit or a required ratio between rehabilitation and refinancing; 

ii. Require a review of management practices to demonstrate that disinvestment 

in the property has not occurred, that the long term needs of the project can be 

met and that the feasibility of serving the targeted population over an extended 

affordability period can be demonstrated; 

iii. State whether the new investment is being made to maintain current affordable 

units, create additional affordable units, or both; 

iv. Specify the required period of affordability, whether it is the minimum 15 

years or longer; 

v. Specify whether the investment of HOME funds may be jurisdiction-wide or 

limited to a specific geographic area, such as a neighborhood identified in a 

neighborhood revitalization strategy under 24 CFR 91.215(e)(2) or a Federally 

designated Empowerment Zone or Enterprise Community; and 

vi. State that HOME funds cannot be used to refinance multifamily loans made or 

insured by any Federal program, including CDBG. 

c. Acquisition costs. Costs of acquiring improved or unimproved real property, including 

acquisition by homebuyers. 

d. Related soft costs. Other reasonable and necessary costs incurred by the owner or 

participating jurisdiction and associated with the financing, or development (or both) of 

new construction, rehabilitation or acquisition of housing assisted with HOME funds. 

These costs include, but are not limited to: 

1. Architectural, engineering or related professional services required to prepare plans, 

drawings, specifications, or work write-ups. 

2. Costs to process and settle the financing for a project, such as private lender 

origination fees, credit reports, fees for title evidence, fees for recordation and filing 

of legal documents, building permits, attorneys fees, private appraisal fees and fees 

for an independent cost estimate, builders or developers fees. 

3. Costs of a project audit that the participating jurisdiction may require with respect to 

the development of the project. 

4. Costs to provide information services such as affirmative marketing and fair 

housing information to prospective homeowners and tenants as required by 

§ 92.351. 

5. For new construction or rehabilitation, the cost of funding an initial operating deficit 

reserve, which is a reserve to meet any shortfall in project income during the period 

of project rent-up (not to exceed 18 months) and which may only be used to pay 

project operating expenses, scheduled payments to a replacement reserve, and debt 

27
service. Any HOME funds placed in an operating deficit reserve that remain 

unexpended after the period of project rent-up may be retained for project reserves 

if permitted by the participating jurisdiction. 

6. Staff and overhead costs directly related to carrying out the project, such as work 

specifications preparation, loan processing inspections, and other services related to 

assisting potential owners, tenants, and homebuyers, e.g., housing counseling, may 

be charged to project costs only if the project is funded and the individual becomes 

the owner or tenant of the HOME-assisted project. For multi-unit projects, such 

costs must be allocated among HOME-assisted units in a reasonable manner and 

documented. 

7. For both new construction and rehabilitation, costs for the payment of impact fees 

that are charged for all projects within a jurisdiction. 

8. Costs of environmental review and release of funds in accordance with 24 CFR Part 

58 which are directly related to the project. 

e. Community housing development organization costs. Eligible costs of project-specific 

assistance are set forth in § 92.301. 

f. Relocation costs. The cost of relocation payments and other relocation assistance to 

persons displaced by the project are eligible costs. 

1. Relocation payments include replacement housing payments, payments for moving 

expenses, and payments for reasonable out-of-pocket costs incurred in the 

temporary relocation of persons. 

2. Other relocation assistance means staff and overhead costs directly related to 

providing advisory and other relocation services to persons displaced by the project, 

including timely written notices to occupants, referrals to comparable and suitable 

replacement property, property inspections, counseling, and other assistance 

necessary to minimize hardship. 

g. Costs relating to payment of loans. If the HOME funds are not used to directly pay a cost 

specified in this section, but are used to pay off a construction loan, bridge financing 

loan, or guaranteed loan, the payment of principal and interest for such loan is an eligible 

cost only if: 

1. The loan was used for eligible costs specified in this section, and 

2. The HOME assistance is part of the original financing for the project and the project 

meets the requirements of this part. 

§ 92.207 Eligible Administrative and Planning Costs 

A participating jurisdiction may expend, for payment of reasonable administrative and 

planning costs of the HOME program and ADDI, an amount of HOME funds that is not more 

than ten percent of the sum of the Fiscal Year HOME basic formula allocation plus any funds 

received in accordance with § 92.102(b) to meet or exceed participation threshold 

28
requirements that Fiscal Year. A state that transfers any HOME funds in accordance with 

§ 92.102(b) must exclude these funds in calculating the amount it may expend for 

administrative and planning costs. A participating jurisdiction may also expend, for payment 

of reasonable administrative and planning costs of the HOME program and the ADDI 

described in subpart M of this part, a sum up to ten percent of the program income deposited 

into its local account or received and reported by its state recipients or subrecipients during 

the program year. A participating jurisdiction may expend such funds directly or may 

authorize its state recipients or subrecipients, if any, to expend all or a portion of such funds, 

provided total expenditures for planning and administrative costs do not exceed the maximum 

allowable amount. Reasonable administrative and planning costs include: 

a. General management, oversight and coordination. Reasonable costs of overall program 

management, coordination, monitoring, and evaluation. Such costs include, but are not 

limited to, necessary expenditures for the following: 

1. Salaries, wages, and related costs of the participating jurisdiction’s staff. In charging 

costs to this category the participating jurisdiction may either include the entire 

salary, wages, and related costs allocable to the program of each person whose 

primary responsibilities with regard to the program involves program administration 

assignments, or the prorated share of the salary, wages, and related costs of each 

person whose job includes any program administration assignments. The 

participating jurisdiction may use only one of these methods. Program 

administration includes the following types of assignments: 

i. Developing systems and schedules for ensuring compliance with program 

requirements; 

ii. Developing interagency agreements and agreements with entities receiving 

HOME funds; 

iii. Monitoring HOME-assisted housing for progress and compliance with 

program requirements; 

iv. Developing agreements and monitoring housing not assisted with HOME 

funds that the participating jurisdiction designates as a matching contribution 

in accordance with § 92.219(b) for compliance with applicable program 

requirements; 

v. Preparing reports and other documents related to the program for submission to 

HUD; 

vi. Coordinating the resolution of audit and monitoring findings; 

vii. Evaluating program results against stated objectives; and 

viii. Managing or supervising persons whose primary responsibilities with regard to 

the program include such assignments as those described in paragraphs 

(a)(1)(i) through (vii) of this section; 

2. Travel costs incurred for official business in carrying out the program; 

29
3. Administrative services performed under third party contracts or agreements, 

including such services as general legal services, accounting services, and audit 

services; 

4. Other costs for goods and services required for administration of the program, 

including such goods and services as rental or purchase of equipment, insurance, 

utilities, office supplies, and rental and maintenance (but not purchase) of office 

space; and 

5. Costs of administering tenant-based rental assistance programs. 

b. Staff and overhead. Staff and overhead costs directly related to carrying out the project, 

such as work specifications preparation, loan processing, inspections, and other services 

related to assisting potential owners, tenants, and homebuyers (e.g., housing counseling); 

and staff and overhead costs directly related to providing advisory and other relocation 

services to persons displaced by the project, including timely written notices to 

occupants, referrals to comparable and suitable replacement property, property 

inspections, counseling, and other assistance necessary to minimize hardship. These 

costs may be charged as administrative costs or as project costs under § 92.206 (d)(6) 

and (f)(2), at the discretion of the participating jurisdiction. 

c. Public information. The provision of information and other resources to residents and 

citizen organizations participating in the planning, implementation, or assessment of 

projects being assisted with HOME funds. 

d. Fair housing. Activities to affirmatively further fair housing in accordance with the 

participating jurisdiction’s certification under 24 CFR part 91. 

e. Indirect Costs. Indirect costs may be charged to the HOME program under a cost 

allocation plan prepared in accordance with OMB Circulars A-87 or A-122 as applicable. 

f. Preparation of the consolidated plan. Preparation of the consolidated plan required 

under 24 CFR part 91. Preparation includes the costs of public hearings, consultations, 

and publication. 

g. Other Federal requirements. Costs of complying with the Federal requirements in 

subpart H of this part. Project-specific environmental review costs may be charged as 

administrative costs or as project costs in accordance with § 92.206(d)(8), at the 

discretion of the participating jurisdiction. 

§ 92.208 Eligible Community Housing Development Organization (CHDO) 

Operating Expense and Capacity Building Costs 

a. Up to 5 percent of a participating jurisdiction’s fiscal year HOME allocation may be 

used for the operating expenses of community housing development organizations 

(CHDOs). These funds may not be used to pay operating expenses incurred by a CHDO 

acting as a subrecipient or contractor under the HOME Program. Operating expenses 

means reasonable and necessary costs for the operation of the community housing 

development organization. Such costs include salaries, wages, and other employee 

30
compensation and benefits; employee education, training, and travel; rent; utilities; 

communication costs; taxes; insurance; equipment; materials and supplies. The 

requirements and limitations on the receipt of these funds by CHDOs are set forth in 

§ 92.300(e) and (f). 

b. HOME funds may be used for capacity building costs under § 92.300(b). 

 § 92.209 Tenant-based Rental Assistance: Eligible Costs and Requirements 

a. Eligible costs. Eligible costs are the rental assistance and security deposit payments made 

to provide tenant-based rental assistance for a family pursuant to this section. 

Administration of tenant-based rental assistance is eligible only under general 

management oversight and coordination at § 92.207(a). 

b. General requirement. A participating jurisdiction may use HOME funds for tenant-based 

rental assistance only if the participating jurisdiction makes the certification about 

inclusion of this type of assistance in its consolidated plan in accordance with 24 CFR 

91.225(d)(1), 91.325(d)(1), or 91.425(a)(2)(i), and specifies local market conditions that 

lead to the choice of this option. 

c. Tenant selection. The participating jurisdiction must select families in accordance with 

written tenant selection policies and criteria that are consistent with the following: 

1. Low-income families. Tenant-based rental assistance may only be provided to very 

low- and low-income families. The participating jurisdiction must determine that 

the family is very low- or low-income before the assistance is provided. During the 

period of assistance, the participating jurisdiction must annually determine that the 

family continues to be low-income. 

2. Preferences for Individuals with Special Needs. 

i. The participating jurisdiction may establish a preference for individuals with 

special needs. The participating jurisdiction may offer, in conjunction with a 

tenant-based rental assistance program, particular types of non-mandatory 

services that may be most appropriate for persons with a special need or a 

particular disability. Generally, tenant-based rental assistance and the related 

services should be made available to all persons with special needs or 

disabilities who can benefit from such services. 

ii. The participating jurisdiction may also provide a preference for a specific 

category of individuals with disabilities (e.g., persons with HIV/AIDS or 

chronic mental illness) if the specific category is identified in the participating 

jurisdiction’s consolidated plan as having unmet need and the preference is 

needed to narrow the gap in benefits and services received by such persons. 

iii. Preferences cannot be administered in a manner that limits the opportunities of 

persons on any basis prohibited by the laws listed under 24 CFR 5.105(a). For 

example, a participating jurisdiction may not determine that persons given a 

preference under the program are therefore prohibited from applying for or 

participating in other programs or forms of assistance. 

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3. Existing tenants in the HOME-assisted projects. A participating jurisdiction may 

select low-income families currently residing in housing units that are designated 

for rehabilitation or acquisition under the participating jurisdiction’s HOME 

program. Participating jurisdictions using HOME funds for tenant-based rental 

assistance programs may establish local preferences for the provision of this 

assistance. Families so selected may use the tenant-based assistance in the 

rehabilitated or acquired housing unit or in other qualified housing. 

d. Portability of assistance. A participating jurisdiction may require the family to use the 

tenant-based assistance within the participating jurisdiction’s boundaries or may permit 

the family to use the assistance outside its boundaries. 

e. Term of rental assistance contract. The term of the rental assistance contract providing 

assistance with HOME funds may not exceed 24 months, but may be renewed, subject to 

the availability of HOME funds. The term of the rental assistance contract must begin on 

the first day of the term of the lease. For a rental assistance contract between a 

participating jurisdiction and an owner, the term of the contract must terminate on 

termination of the lease. For a rental assistance contract between a participating 

jurisdiction and a family, the term of the contract need not end on termination of the 

lease, but no payments may be made after termination of the lease until a family enters 

into a new lease. 

f. Rent reasonableness. The participating jurisdiction must disapprove a lease if the rent is 

not reasonable, based on rents that are charged for comparable unassisted rental units. 

g. Tenant protections. The lease must comply with the requirements in § 92.253(a) and (b). 

h. Maximum subsidy. 

1. The amount of the monthly assistance that a participating jurisdiction may pay to, or 

on behalf of, a family may not exceed the difference between a rent standard for the 

unit size established by the participating jurisdiction and 30 percent of the family’s 

monthly adjusted income. 

2. The participating jurisdiction must establish a minimum tenant contribution to rent. 

3. The participating jurisdiction’s rent standard for a unit size must be based on: 

i. Local market conditions; or 

ii. For each unit size, may not be less than 80 percent of the published Section 8 

Existing Housing fair market rent (in effect when the payment standard 

amount is adopted) nor more than the fair market rent or HUD-approved 

community- wide exception rent (in effect when the participating jurisdiction 

adopts its rent standard amount). (Community-wide exception rents are 

maximum gross rents approved by HUD for the Rental Certificate Program 

under 24 CFR 882.106(a)(3) for a designated municipality, county, or similar 

locality, which apply to the whole PHA jurisdiction.) A participating 

jurisdiction may approve on a unit-by- unit basis a subsidy based on a rent 

32
standard that exceeds the applicable fair market rent by up to 10 percent for 20 

percent of units assisted. 

i. Housing quality standards. Housing occupied by a family receiving tenant-based 

assistance under this section must meet the requirements set forth in 24 CFR 982.401. 

The participating jurisdiction must inspect the housing initially and re-inspect it 

annually. 

j. Security deposits. 

1. A participating jurisdiction may use HOME funds provided for tenant-based rental 

assistance to provide loans or grants to very low- and low-income families for 

security deposits for rental of dwelling units whether or not the participating 

jurisdiction provides any other tenant-based rental assistance under this section. 

2. The relevant State or local definition of “security deposit” in the jurisdiction where 

the unit is located is applicable for the purposes of this part, except that the amount 

of HOME funds that may be provided for a security deposit may not exceed the 

equivalent of two month’s rent for the unit. 

3. Only the prospective tenant may apply for HOME security deposit assistance, 

although the participating jurisdiction may pay the funds directly to the tenant or to 

the landlord. 

4. HOME funds for security deposits may be provided as a grant or as a loan. If they 

are provided as a loan, the loan repayments are program income to be used in 

accordance with § 92.503. 

5. Paragraphs (b), (c), (d), (f), (g) and (i) of this section are applicable to HOME 

security deposit assistance, except that income determinations pursuant to paragraph 

(c)(1) of this section and Housing Quality Standard inspections pursuant to 

paragraph (i) of this section are required only at the time the security deposit 

assistance is provided. 

k. Program operation. A tenant-based rental assistance program must be operated 

consistent with the requirements of this section. The participating jurisdiction may 

operate the program itself, or may contract with a PHA or other entity with the capacity 

to operate a rental assistance program. The tenant-based rental assistance may be 

provided through an assistance contract to an owner that leases a unit to an assisted 

family or directly to the family. In either case, the participating jurisdiction (or entity 

operating the program) must approve the lease. 

l. Use of Section 8 assistance. In any case where assistance under section 8 of the 

1937 Act becomes available to a participating jurisdiction, recipients of tenantbased rental assistance under this part will qualify for tenant selection preferences to 

the same extent as when they received the tenant-based rental assistance under this 

part. 

33
§ 92.212 Pre-award Costs 

a. General. Before the effective date of the HOME Investment Partnership Agreement, the 

participating jurisdiction may incur costs which may be charged to the HOME allocation 

after the award of the HOME allocation, provided the costs are in compliance with the 

requirements of this part (including environmental review requirements) and with the 

statutory and regulatory requirements in effect at the time the costs are charged to the 

HOME allocation. 

b. Administrative and planning costs. Eligible administrative and planning costs may be 

incurred as of the beginning of the participating jurisdiction’s consolidated program year 

(see 24 CFR 91.10) or the date the consolidated plan describing the HOME allocation to 

which the costs will be charged is received by HUD, whichever is later. 

c. Project costs. Eligible project costs may be incurred during the current program year in 

an amount not to exceed 25% of the current HOME allocation amount, to be charged to 

the following year’s HOME allocation. Before incurring the pre-award costs, the 

participating jurisdiction must comply with its citizen participation plan requirements 

addressing 24 CFR 91.105(b)(2), (4), (5) and (g) (local governments) or 91.115(b)(2), 

(4), (5) and (f) (States). In lieu of a full action plan, the participating jurisdiction may 

develop a mini-action plan which describes the proposed pre-award projects and costs in 

accordance with 91.220(c) and includes, if applicable, 91.220(g)(2) (local governments) 

or 91.320(c) and, if applicable, 91.320(g)(2) (States). The mini-action plan must state 

that HOME funding for the project(s) is subject to the future availability of HOME 

funds. The subsequent action plan (i.e., action plan for the HOME allocation to which 

the costs will be charged) must also include the use of HOME funds contained in the 

mini-action plan. 

d. Subrecipient or State recipient costs. The participating jurisdiction may authorize its 

subrecipient or State recipient to incur pre-award costs in accordance with the 

requirements of this section. The authorization must be in writing. 

e. Other pre-agreement costs. Pre-agreement costs in excess of the amount set forth in 

paragraph (c) of this section must be approved, in writing, by the HUD Field Office 

before the costs are incurred. 

§ 92.213 [Reserved] 

§ 92.214 Prohibited Activities 

a. HOME funds may not be used to: 

1. Provide project reserve accounts, except as provided in § 92.206(d)(5), or operating 

subsidies; 

2. Provide tenant-based rental assistance for the special purposes of the existing 

section 8 program, in accordance with section 212(d) of the Act; 

34
3. Provide non-federal matching contributions required under any other Federal 

program; 

4. Provide assistance authorized under section 9 of the 1937 Act (Public Housing 

Capital and Operating Funds); 

5. Provide assistance to eligible low-income housing under 24 CFR part 248 

(Prepayment of Low Income Housing Mortgages), except that assistance may be 

provided to priority purchasers as defined in 24 CFR 248.101; 

6. Provide assistance (other than tenant-based rental assistance or assistance to a 

homebuyer to acquire housing previously assisted with HOME funds) to a project 

previously assisted with HOME funds during the period of affordability established 

by the participating jurisdiction in the written agreement under § 92.504. However, 

additional HOME funds may be committed to a project up to one year after project 

completion (see § 92.502), but the amount of HOME funds in the project may not 

exceed the maximum per-unit subsidy amount established under § 92.250. 

7. Pay for the acquisition of property owned by the participating jurisdiction, except 

for property acquired by the participating jurisdiction with HOME funds, or 

property acquired in anticipation of carrying out a HOME project; or 

8. Pay delinquent taxes, fees or charges on properties to be assisted with HOME funds. 

9. Pay for any cost that is not eligible under §§ 92.206 through 92.209. 

b. Participating jurisdictions may not charge monitoring, servicing and origination fees in 

HOME-assisted projects. However, participating jurisdictions may charge nominal 

application fees (although these fees are not an eligible HOME cost) to project owners to 

discourage frivolous applications. Such fees are applicable credits under OMB Circular 

A-87. 

§ 92.215 Limitation on Jurisdictions under Court Order 

Limitations on the use of HOME funds in connection with litigation involving discrimination 

or fair housing are set forth in section 224 of the Act. 

INCOME TARGETING 

§ 92.216 Income Targeting: Tenant-based Rental Assistance and Rental Units 

Each participating jurisdiction must invest HOME funds made available during a fiscal year 

so that, with respect to tenant-based rental assistance and rental units: 

a. Not less than 90 percent of: 

1. The families receiving such rental assistance are families whose annual incomes do 

not exceed 60 percent of the median family income for the area, as determined and 

35
made available by HUD with adjustments for smaller and larger families (except 

that HUD may establish income ceilings higher or lower than 60 percent of the 

median for the area on the basis of HUD’s findings that such variations are 

necessary because of prevailing levels of construction cost or fair market rent, or 

unusually high or low family income) at the time of occupancy or at the time funds 

are invested, whichever is later; or 

2. The dwelling units assisted with such funds are occupied by families having such 

incomes; and 

b. The remainder of: 

1. The families receiving such rental assistance are households that qualify as lowincome families (other than families described in paragraph (a)(1) of this section) at 

the time of occupancy or at the time funds are invested, whichever is later; or 

2. The dwelling units assisted with such funds are occupied by such households. 

§ 92.217 Income Targeting: Homeownership 

Each participating jurisdiction must invest HOME funds made available during a fiscal year 

so that with respect to homeownership assistance, 100 percent of these funds are invested in 

dwelling units that are occupied by households that qualify as low-income families. 

MATCHING CONTRIBUTION REQUIREMENT 

§ 92.218 Amount of Matching Contribution 

a. General. Each participating jurisdiction must make contributions to housing that 

qualifies as affordable housing under the HOME program, throughout a fiscal year. The 

contributions must total not less than 25 percent of the funds drawn from the 

jurisdiction’s HOME Investment Trust Fund Treasury account in that fiscal year, 

excluding funds drawn for purposes identified in paragraph (c) of this section. 

b. Shortfall amount from State or local resources. Amounts made available under 

§ 92.102(b)(2) from the resources of a State (other than a transfer of the State’s formula 

allocation), the local participating jurisdiction, or both, to enable the local participating 

jurisdiction to meet the participation threshold amount are not required to be matched 

and do not constitute matching contributions. 

c. HOME funds not required to be matched. HOME funds used for administrative and 

planning costs (pursuant to § 92.207); community housing development organization 

operating expenses (pursuant to § 92.208); capacity building (pursuant to 92.300(b)) of 

community housing development organizations; and project specific assistance to 

community housing development organizations (pursuant to § 92.301) when the 

participating jurisdiction waives repayment under the provisions of § 92.301(a)(3) or 

§ 92.301(b)(3) are not required to be matched. 

36
d. Match contribution for other programs. Contributions that have been or will be counted 

as satisfying a matching requirement of another Federal grant or award may not count as 

satisfying the matching contribution requirement for the HOME program. 

§ 92.219 Recognition of Matching Contribution 

a. Match contribution to HOME-assisted housing. A contribution is recognized as a 

matching contribution if it is made with respect to: 

1. A tenant who is assisted with HOME funds; 

2. A HOME-assisted unit; 

3. The portion of a project that is not HOME-assisted provided that at least 50 percent 

of the housing units in the project are HOME-assisted. If the match contribution to 

the portion of the project that is not HOME-assisted meets the affordable housing 

requirements of § 92.219(b)(2), the percentage requirement for HOME-assisted 

units does not apply; or 

4. The commercial space in a mixed-use project in which at least 51 percent of the 

floor space is residential provided that at least 50 percent of the dwelling units are 

HOME-assisted. 

b. Match contribution to affordable housing that is not HOME-assisted. The following 

requirements apply for recognition of matching contributions made to affordable housing 

that is not HOME-assisted: 

1. For tenant-based rental assistance that is not HOME-assisted: 

i. The contribution must be made with respect to a tenant who is assisted with 

tenant-based rental assistance that meets the requirements of § 92.203 (Income 

determinations) and paragraphs (a), (c), (f), and (i) of § 92.209 (Tenant-based 

rental assistance); and 

ii. The participating jurisdiction must demonstrate in writing that such assistance 

meets the provisions of §§ 92.203 and 92.209 (except § 92.209(e)). 

2. For affordable housing that is not HOME-assisted: 

i. The contribution must be made with respect to housing that qualifies as 

affordable housing under § 92.252 or § 92.254. 

ii. The participating jurisdiction or its instrumentality must execute, with the 

owner of the housing (or, if the participating jurisdiction is the owner, with the 

manager or developer), a written agreement that imposes and enumerates all of 

the affordability requirements from § 92.252 and § 92.253(a) and (b) (Tenant 

protections), or § 92.254, whichever are applicable; the property standards 

requirements of § 92.251; and income determinations made in accordance with 

§ 92.203. This written agreement must be executed before any match 

contributions may be made. 

37
iii. A participating jurisdiction must establish a procedure to monitor HOME 

match-eligible housing to ensure continued compliance with the requirements 

of §§ 92.203 (Income determinations), 92.252 (Qualification as affordable 

housing: Rental housing), 92.253(a) and (b) (Tenant protections) and 92.254 

(Qualification as affordable housing: Homeownership). No other HOME 

requirements apply. 

iv. The match may be in any eligible form of match except those in § 92.220(a)(2) 

(forbearance of fees), (a)(4) (on-site and off-site infrastructure), (a)(10) (direct 

cost of supportive services) and (a)(11) (direct costs of homebuyer counseling 

services). 

v. Match contributions to mixed-use or mixed-income projects that contain 

affordable housing units will be recognized only if the contribution is made to 

the project’s affordable housing units. 

§ 92.220 Form of Matching Contribution 

a. Eligible forms. Matching contributions must be made from nonfederal resources and may 

be in the form of one or more of the following: 

1. Cash contributions from nonfederal sources. To be recognized as a cash 

contribution, funds must be contributed permanently to the HOME program (or to 

affordable housing not assisted with HOME funds), regardless of the form of 

investment provided to the project. Therefore, to receive match credit for the full 

amount of a loan to a HOME project, all repayment, interest, or other return on 

investment of the contribution must be deposited in the local account of the 

participating jurisdiction’s HOME Investment Trust Fund to be used for eligible 

HOME activities in accordance with the requirements of this part. A cash 

contribution to affordable housing that is not assisted with HOME funds must be 

contributed permanently to the project. Repayments of matching contributions in 

affordable housing projects, as defined in § 92.219(b), that are not HOME-assisted, 

must be made to the local account of the participating jurisdiction’s HOME 

Investment Trust Fund to get match credit for the full loan amount. 

i. A cash contribution may be made by the participating jurisdiction, non-Federal 

public entities, private entities, or individuals, except as prohibited under 

paragraph (b)(4) of this section. A cash contribution made to a nonprofit 

organization for use in a HOME project may be counted as a matching 

contribution. 

ii. A cash contribution may be made from program income (as defined by 24 CFR 

§ 85.25(b)) from a Federal grant earned after the end of the award period if no 

Federal requirements govern the disposition of the program income. Included 

in this category are repayments from closed out grants under the Urban 

Development Action Grant Program (24 CFR part 570, subpart G) and the 

Housing Development Grant Program (24 CFR part 850), and from the Rental 

Rehabilitation Grant Program (24 CFR part 511) after all fiscal year Rental 

Rehabilitation grants have been closed out. 

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iii. The grant equivalent of a below-market interest rate loan to the project that is 

not repayable to the participating jurisdiction’s HOME Investment Trust Fund 

may be counted as a cash contribution, as follows: 

A. If the loan is made from funds borrowed by a jurisdiction or public 

agency or corporation the contribution is the present discounted cash 

value of the difference between the payments to be made on the borrowed 

funds and payments to be received from the loan to the project based on a 

discount rate equal to the interest rate on the borrowed funds. 

B. If the loan is made from funds other than funds borrowed by a jurisdiction 

or public agency or corporation, the contribution is the present discounted 

cash value of the yield foregone. In determining the yield foregone, the 

participating jurisdiction must use as a measure of a market rate yield one 

of the following, as appropriate: 

1. With respect to one- to four-unit housing financed with a fixed 

interest rate mortgage, a rate equal to the 10-year Treasury note rate 

plus 200 basis points; 

2. With respect to one- to four-unit housing financed with an adjustable 

interest rate mortgage, a rate equal to the one-year Treasury bill rate 

plus 250 basis points; 

3. With respect to a multifamily project, a rate equal to the 10-year 

Treasury note rate plus 300 basis points; 

4. With respect to housing receiving financing for rehabilitation, a rate 

equal to the 10-year Treasury note rate plus 400 basis points. 

iv. Proceeds of bonds that are not repaid with revenue from an affordable housing 

project (e.g., general obligation bonds) and that are loaned to a HOME-assisted 

or other qualified affordable housing project constitute a cash contribution 

under this paragraph. 

v. A cash contribution may be counted as a matching contribution only if it is 

used for costs eligible under §§ 92.206 or 92.209, or for the following (which 

are not HOME eligible costs): the cost of removing and relocating ECHO 

housing unit during the period of affordability in accordance with 

§ 92.258(d)(3)(ii), payments to a project reserve account beyond payments 

permitted by § 92.206(d)(5), operating subsidies, or costs relating to the 

portion of a mixed-income or mixed-use HOME-assisted project not related to 

the affordable housing units. 

2. Forbearance of fees. 

i. State and local taxes, charges or fees. The value (based on customary and 

reasonable means for establishing value) of State or local taxes, fees, or other 

charges that are normally and customarily imposed or charged by a State or 

local government on all transactions or projects in the conduct of its 

39
operations, which are waived, foregone, or deferred (including State lowincome housing tax credits) in a manner that achieves affordability of HOMEassisted projects, may be counted as match. The amount of any real estate 

taxes may be based on post-improvement property value. For taxes, fees, or 

charges that are forgiven for future years, the value is the present discounted 

cash value, based on a rate equal to the rate for the Treasury security with a 

maturity closest to the number of years for which the taxes, fees, or charges are 

waived, foregone, or deferred. 

ii. Other charges or fees. The value of fees or charges associated with the transfer 

or development of real estate that are normally and customarily imposed or 

charged by public or private entities, which are waived or foregone, in whole 

or in part, in a manner that achieves affordability of HOME-assisted projects, 

may be counted as match. Fees and charges under this paragraph do not 

include fees or charges for legal or other professional services; professional 

services which are donated, in whole or in part, are an eligible matching 

contribution in accordance with paragraph (a)(7) of this section. 

iii. Fees or charges that are associated with the HOME Program only (rather than 

normally and customarily imposed or charged on all transactions or projects) 

are not eligible forms of matching contributions. 

3. Donated Real Property. The value, before the HOME assistance is provided and 

minus any debt burden, lien, or other encumbrance, of donated land or other real 

property may be counted as match. The donation may be made by the participating 

jurisdiction, non-Federal public entities, private entities, or individuals, except as 

prohibited under paragraph (b)(4) of this section. 

i. Donated property not acquired with Federal resources is a contribution in the 

amount of 100% of the value. 

ii. Donated property acquired with Federal assistance may provide a partial 

contribution as follows. The property must be acquired with Federal assistance 

specifically for a HOME project (or for affordable housing that will be counted 

as match pursuant to § 92.219(b)(2)). The property must be acquired with the 

Federal assistance at demonstrably below the appraised value and must be 

acknowledged by the seller as a donation to affordable housing at the time of 

the acquisition with the Federal assistance. The amount of the contribution is 

the difference between the acquisition price and the appraised value at the time 

of acquisition with the Federal assistance. If the property is acquired with the 

Federal assistance by someone other than the HOME project (or affordable 

housing) owner, to continue to qualify as a contribution, the property must be 

given to the HOME project (or affordable housing) owner at a price that does 

not exceed the amount of the Federal assistance used to acquire the property. 

iii. Property must be appraised in conformance with established and generally 

recognized appraisal practice and procedures in common use by professional 

appraisers. Opinions of value must be based on the best available data properly 

analyzed and interpreted. The appraisal of land and structures must be 

performed by an independent, certified appraiser. 

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4. The cost, not paid with Federal resources, of on-site and off-site infrastructure that 

the participating jurisdiction documents are directly required for HOME-assisted 

projects. The infrastructure must have been completed no earlier than 12 months 

before HOME funds are committed to the project. 

5. Proceeds from multifamily and single family affordable housing project bond 

financing validly issued by a State or local government, or an agency or 

instrumentality of a State or local government or a political subdivision of a State 

and repayable with revenues from the affordable housing project financed as 

follows: 

i. Fifty percent of the loan amount made from bond proceeds to a multifamily 

affordable housing project owner may qualify as match. 

ii. Twenty-five percent of the loan amount from bond proceeds made to a singlefamily affordable housing project owner may qualify as match. 

iii. Loans made from bond proceeds may not constitute more than 25 percent of a 

participating jurisdiction’s total annual match contribution. 

6. The reasonable value of donated site-preparation and construction materials, not 

acquired with Federal resources. The value of site-preparation and construction 

materials is to be determined in accordance with the participating jurisdiction’s cost 

estimate procedures. 

7. The reasonable rental value of the donated use of site preparation or construction 

equipment. 

8. The value of donated or voluntary labor or professional services (see § 92.354(b)) in 

connection with the provision of affordable housing. A single rate established by 

HUD shall be applicable for determining the value of unskilled labor. The value of 

skilled labor or professional services shall be determined by the rate that the 

individual or entity performing the labor or service normally charges. 

9. The value of sweat equity (see § 92.354(c)) provided to a homeownership project, 

under an established component of a participating jurisdiction’s program, up until 

the time of project completion (i.e., submission of a project completion form). Such 

labor shall be valued at the rate established for unskilled labor at paragraph (a)(8) of 

this section. 

10. The direct cost of supportive services provided to families residing in HOMEassisted units during the period of affordability or receiving HOME tenant-based 

rental assistance during the term of the tenant-based rental assistance contract. The 

supportive services must be necessary to facilitate independent living or be required 

as part of a self-sufficiency program. Examples of supportive services include: case 

management, mental health services, assistance with the tasks of daily living, 

substance abuse treatment and counseling, day care, and job training and 

counseling. 

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11. The direct cost of homebuyer counseling services provided to families that acquire 

properties with HOME funds under the provisions of § 92.254(a), including 

ongoing counseling services provided during the period of affordability. These 

services may be provided as part of a homebuyer counseling program that is not 

specific to the HOME Program, but only the cost of services to families that 

complete purchases with HOME assistance may be counted as match. 

b. Ineligible forms. The following are examples that do not meet the requirements of 

paragraph (a) of this section and do not count toward meeting a participating 

jurisdiction’s matching contribution requirement: 

1. Contributions made with or derived from Federal resources or funds, regardless of 

when the Federal resources or funds were received or expended. CDBG funds 

(defined in 24 CFR 570.3) are Federal funds for this purpose; 

2. The interest rate subsidy attributable to the Federal tax-exemption on financing or 

the value attributable to Federal tax credits; 

3. Owner equity or investment in a project; and 

4. Cash or other forms of contributions from applicants for or recipients of HOME 

assistance or contracts, or investors who own, are working on, or are proposing to 

apply for, assistance for a HOME-assisted project. The prohibition in this paragraph 

(b)(4) does not apply to contractors (who do not own any HOME project) 

contributing professional services in accordance with paragraph (a)(8) of this 

section or to persons contributing sweat equity in accordance with paragraph (a)(9) 

of this section. 

§ 92.221 Match Credit 

a. When credit is given. Contributions are credited on a fiscal year basis at the time the 

contribution is made, as follows: 

1. A cash contribution is credited when the funds are expended. 

2. The grant equivalent of a below-market interest rate loan is credited at the time of 

the loan closing. 

3. The value of state or local taxes, fees, or other charges that are normally and 

customarily imposed but are waived, foregone, or deferred is credited at the time the 

state or local government or other public or private entity officially waives, forgoes, 

or defers the taxes, fees, or other charges and notifies the project owner. 

4. The value of donated land or other real property is credited at the time ownership of 

the property is transferred to the HOME project (or affordable housing) owner. 

5. The cost of investment in infrastructure directly required for HOME-assisted 

projects is credited at the time funds are expended for the infrastructure or at the 

time the HOME funds are committed to the project if the infrastructure was 

completed before the commitment of HOME funds. 

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6. The value of donated material is credited as match at the time it is used for 

affordable housing. 

7. The value of the donated use of site preparation or construction equipment is 

credited as match at the time the equipment is used for affordable housing. 

8. The value of donated or voluntary labor or professional services is credited at the 

time the work is performed. 

9. A loan made from bond proceeds under § 92.220(a)(5) is credited at the time of the 

loan closing. 

10. The direct cost of social services provided to residents of HOME-assisted units is 

credited at the time that the social services are provided during the period of 

affordability. 

11. The direct cost of homebuyer counseling services provided to families that purchase 

HOME-assisted units is credited at the time that the homebuyer purchases the unit 

or for post-purchase counseling services, at the time the counseling services are 

provided. 

b. Excess match. Contributions made in a fiscal year that exceed the participating 

jurisdiction’s match liability for the fiscal year in which they were made may be carried 

over and applied to future fiscal years’ match liability. Loans made from bond proceeds 

in excess of 25 percent of a participating jurisdiction’s total annual match contribution 

may be carried over to subsequent fiscal years as excess match, subject to the annual 25 

percent limitation. 

c. Credit for match contributions shall be assigned as follows: 

1. For HOME-assisted projects involving more than one participating jurisdiction, the 

participating jurisdiction that makes the match contribution may decide to retain the 

match credit or permit the other participating jurisdiction to claim the credit. 

2. For HOME match contributions to affordable housing that is not HOME-assisted 

(match pursuant to § 92.219(b)) involving more than one participating jurisdiction, 

the participating jurisdiction that makes the match contribution receives the match 

credit. 

3. A State that provides non-Federal funds to a local participating jurisdiction to be 

used for a contribution to affordable housing, whether or not HOME-assisted, may 

take the match credit for itself or may permit the local participating jurisdiction to 

receive the match credit. 

§ 92.222 Reduction of Matching Contribution Requirement 

a. Reduction for fiscal distress. HUD will determine match reductions annually. 

1. Distress criteria for local government participating jurisdictions. If a local 

government participating jurisdiction satisfies both of the distress factors in 

43
paragraphs (a)(1)(i) and (ii) of this section, it is in severe fiscal distress and its 

match requirement will be reduced by 100% for the period specified in paragraph 

(a)(3) of this section. If a local government participating jurisdiction satisfies either 

distress factor in paragraphs (a)(1)(i) or (ii) of this section, it is in fiscal distress and 

its match requirement will be reduced by 50 percent, for the period specified in 

paragraph (a)(4) of this section. 

i. Poverty rate. The average poverty rate in the participating jurisdiction was 

equal to or greater than 125 percent of the average national poverty rate during 

the calendar year for which the most recent data are available, as determined 

according to information of the Bureau of the Census. 

ii. Per capita income. The average per capita income in the participating 

jurisdiction was less than 75 percent of the average national per capita income, 

during the calendar year for which the most recent data are available, as 

determined according to information from the Bureau of the Census. 

2. Distress criteria for participating jurisdictions that are States. If a State satisfies at 

least 2 of the 3 distress factors in paragraphs (a)(2)(i) - (iii) of this section, it is in 

severe fiscal distress and its match requirement will be reduced by 100% for the 

period specified in paragraph (a)(3) of this section. If a State satisfies any 1 of the 3 

distress factors in paragraphs (a)(2)(i) - (iii) of this section, it is in fiscal distress and 

its match requirement will be reduced by 50 percent, for the period specified in 

paragraph (a)(4) of this section. 

i. Poverty rate. The average poverty rate in the State was equal to or greater than 

125 percent of the average national poverty rate during the calendar year for 

which the most recent data are available, as determined according to 

information from the Bureau of the Census. 

ii. Per capita income. The average per capita income in the State was less than 75 

percent of the average national per capita income, during the calendar year for 

which the most recent data are available, as determined according to 

information from the Bureau of the Census. 

iii. Personal income growth. The average personal income growth rate in the State 

over the most recent four quarters for which the data are available was less 

than 75 percent of the average national personal income growth rate during 

that period, as determined according to information from the Bureau of 

Economic Analysis. 

3. Period of match reduction for severe fiscal distress. A 100% match reduction is 

effective for the fiscal year in which the severe fiscal distress determination is made 

and for the following fiscal year. 

4. Period of match reduction for fiscal distress. A 50% match reduction is effective for 

the fiscal year in which the fiscal distress determination is made and for the 

following fiscal year, except that if a severe fiscal distress determination is 

published in that following fiscal year, the participating jurisdiction starts a new 

44
two-year match reduction period in accordance with the provisions of paragraph 

(a)(3) of this section. 

b. Reduction of match for participating jurisdictions in disaster areas. If a participating 

jurisdiction is located in an area in which a declaration of major disaster pursuant to the 

Robert T. Stafford Disaster Relief and Emergency Assistance Act is made, it may request 

a reduction of its matching requirement. For a local participating jurisdiction, the HUD 

Field office may reduce the matching requirement specified in § 92.218 by up to 100 

percent for the fiscal year in which the declaration of major disaster is made and the 

following fiscal year. For a State participating jurisdiction, the HUD Field office may 

reduce the matching requirement specified in § 92.218, by up to 100 percent for the 

fiscal year in which the declaration of major disaster is made and the following fiscal 

year with respect to any HOME funds expended in an area to which the declaration of a 

major disaster applies. At its discretion and upon request of the participating jurisdiction, 

the HUD Field Office may extend the reduction for an additional year. 

SUBPART F – PROJECT REQUIREMENTS 

§ 92.250 Maximum Per-unit Subsidy Amount and Subsidy Layering 

a. Maximum per-unit subsidy amount. The total amount of HOME funds and ADDI funds 

that a participating jurisdiction may invest on a per-unit basis in affordable housing may 

not exceed the per-unit dollar limitations established under section 221(d)(3)(ii) of the 

National Housing Act (12 U.S.C. 17151(d)(3)(ii)) for elevator-type projects that apply to 

the area in which the housing is located. These limits are available from the Multifamily 

Division in the HUD Field Office. If the participating jurisdiction’s per-unit subsidy 

amount has already been increased to 210% as permitted under section 221(d)(3)(ii) of 

the National Housing Act, upon request to the Field Office, HUD will allow the per-unit 

subsidy amount to be increased on a program-wide basis to an amount, up to 240% of the 

original per unit limits. 

b. Subsidy layering. Before committing funds to a project, the participating jurisdiction 

must evaluate the project in accordance with guidelines that it has adopted for this 

purpose and will not invest any more HOME funds, in combination with other 

governmental assistance, than is necessary to provide affordable housing. 

§ 92.251 Property Standards 

a. 

1. Housing that is constructed or rehabilitated with HOME funds must meet all 

applicable local codes, rehabilitation standards, ordinances, and zoning ordinances 

at the time of project completion, except as provided in paragraph (b) of this 

section. The participating jurisdiction must have written standards for rehabilitation 

that ensure that HOME-assisted housing is decent, safe, and sanitary. In the absence 

of a local code for new construction or rehabilitation, HOME-assisted new 

construction or rehabilitation must meet, as applicable: one of three model codes 

(Uniform Building Code (ICBO), National Building Code (BOCA), Standard 

45
(Southern) Building Code (SBCCI)); or the Council of American Building Officials 

(CABO) one or two family code; or the Minimum Property Standards (MPS) in 24 

CFR 200.925 or 200.926. To avoid duplicative inspections when FHA financing is 

involved in a HOME-assisted property, a participating jurisdiction may rely on a 

Minimum Property Standards (MPS) inspection performed by a qualified person. 

Newly constructed housing must meet the current edition of the Model Energy Code 

published by the Council of American Building Officials. 

2. All other HOME-assisted housing (e.g., acquisition) must meet all applicable State 

and local housing quality standards and code requirements and if there are no such 

standards or code requirements, the housing must meet the housing quality 

standards in 24 CFR 982.401. 

3. The housing must meet the accessibility requirements at 24 CFR part 8, which 

implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and 

covered multifamily dwellings, as defined at 24 CFR 100.201, must also meet the 

design and construction requirements at 24 CFR 100.205, which implement the Fair 

Housing Act (42 U.S.C. 3601-3619). 

4. Construction of all manufactured housing must meet the Manufactured Home 

Construction and Safety Standards established in 24 CFR Part 3280. These 

standards pre-empt State and local codes covering the same aspects of performance 

for such housing. Participating jurisdictions providing HOME assistance to install 

manufactured housing units must comply with applicable State and local laws or 

codes. In the absence of such laws or codes, the participating jurisdiction must 

comply with the manufacturer’s written instructions for installation of manufactured 

housing units. Manufactured housing that is rehabilitated using HOME funds must 

meet the requirements set out in paragraph (a)(1) of this section. 

b. The following requirements apply to housing for homeownership that is to be 

rehabilitated after transfer of the ownership interest: 

1. Before the transfer of the homeownership interest, the participating jurisdiction 

must: 

i. Inspect the housing for any defects that pose a danger to health; and 

ii. Notify the prospective purchaser of the work needed to cure the defects and the 

time by which defects must be cured and applicable property standards met. 

2. The housing must be free from all noted health and safety defects before occupancy 

and not later than 6 months after the transfer. 

3. The housing must meet the property standards in paragraph (a)(1) of this section not 

later than 2 years after transfer of the ownership interest. 

c. An owner of rental housing assisted with HOME funds must maintain the housing in 

compliance with all applicable State and local housing quality standards and code 

requirements and if there are no such standards or code requirements, the housing must 

meet the housing quality standards in 24 CFR 982.401. 

46
d. All housing occupied by tenants receiving HOME tenant-based rental assistance must 

meet the housing quality standards in 24 CFR 982.401. 

§ 92.252 Qualification as Affordable Housing: Rental Housing 

The HOME-assisted units in a rental housing project must be occupied only by households 

that are eligible as low-income families and must meet the following requirements to qualify 

as affordable housing. The affordability requirements also apply to the HOME-assisted nonowner-occupied units in single-family housing purchased with HOME funds in accordance 

with § 92.254. 

a. Rent limitation. HUD provides the following maximum HOME rent limits. The 

maximum HOME rents are the lesser of: 

1. The fair market rent for existing housing for comparable units in the area as 

established by HUD under 24 CFR 888.111; or 

2. A rent that does not exceed 30 percent of the adjusted income of a family whose 

annual income equals 65 percent of the median income for the area, as determined 

by HUD, with adjustments for number of bedrooms in the unit. The HOME rent 

limits provided by HUD will include average occupancy per unit and adjusted 

income assumptions. 

b. Additional Rent limitations. In rental projects with five or more HOME-assisted rental 

units, twenty (20) percent of the HOME-assisted units must be occupied by very lowincome families and meet one of following rent requirements: 

1. The rent does not exceed 30 percent of the annual income of a family whose income 

equals 50 percent of the median income for the area, as determined by HUD, with 

adjustments for smaller and larger families. HUD provides the HOME rent limits 

which include average occupancy per unit and adjusted income assumptions. 

However, if the rent determined under this paragraph is higher than the applicable 

rent under (a) of this section, then the maximum rent for units under this paragraph 

is that calculated under paragraph (a). 

2. The rent does not exceed 30 percent of the family’s adjusted income. If the unit 

receives Federal or State project-based rental subsidy and the very low-income 

family pays as a contribution toward rent not more than 30 percent of the family’s 

adjusted income, then the maximum rent (i.e., tenant contribution plus projectbased rental subsidy) is the rent allowable under the Federal or State project-based 

rental subsidy program. 

c. Initial rent schedule and utility allowances. The participating jurisdiction must establish 

maximum monthly allowances for utilities and services (excluding telephone). The 

participating jurisdiction must review and approve rents proposed by the owner for units 

subject to the maximum rent limitations in paragraphs (a) or (b) of this section. For all 

units subject to the maximum rent limitations in paragraphs (a) or (b) of this section for 

which the tenant is paying utilities and services, the participating jurisdiction must ensure 

47
that the rents do not exceed the maximum rent minus the monthly allowances for utilities 

and services. 

d. Nondiscrimination against rental assistance subsidy holders. The owner cannot refuse to 

lease HOME-assisted units to a certificate or voucher holder under 24 CFR part 982— 

Section 8 Tenant-Based Assistance: Unified Rule for Tenant-Based Assistance under the 

Section 8 Rental Certificate Program and the Section 8 Rental Voucher Program or to the 

holder of a comparable document evidencing participation in a HOME tenant-based 

rental assistance program because of the status of the prospective tenant as a holder of 

such certificate, voucher, or comparable HOME tenant-based assistance document. 

e. Periods of Affordability. The HOME-assisted units must meet the affordability 

requirements for not less than the applicable period specified in the following table, 

beginning after project completion. The affordability requirements apply without regard 

to the term of any loan or mortgage or the transfer of ownership. They must be imposed 

by deed restrictions, covenants running with the land, or other mechanisms approved by 

HUD, except that the affordability restrictions may terminate upon foreclosure or transfer 

in lieu of foreclosure. The participating jurisdiction may use purchase options, rights of 

first refusal or other preemptive rights to purchase the housing before foreclosure or deed 

in lieu of foreclosure to preserve affordability. The affordability restrictions shall be 

revived according to the original terms if, during the original affordability period, the 

owner of record before the foreclosure, or deed in lieu of foreclosure, or any entity that 

includes the former owner or those with whom the former owner has or had family or 

business ties, obtains an ownership interest in the project or property. 

Rental Housing Activity Minimum period of affordability in years 

Rehabilitation or acquisition of existing 

housing per unit amount of HOME funds: 

Under $15,000 

5 

$15,000 to $40,000 10 

Over $40,000 or rehabilitation involving 

refinancing 

15 

New Construction or acquisition of newly 

constructed housing 

20 

f. Subsequent rents during the affordability period. 

1. The maximum HOME rent limits are recalculated on a periodic basis after HUD 

determines fair market rents and median incomes. HUD then provides the new 

maximum HOME rent limits to participating jurisdictions. Regardless of changes in 

fair market rents and in median income over time, the HOME rents for a project are 

not required to be lower than the HOME rent limits for the project in effect at the 

time of project commitment. 

48
2. The participating jurisdiction must provide project owners with information on 

updated HOME rent limits so that rents may be adjusted (not to exceed the 

maximum HOME rent limits in paragraph (f)(1) of this section) in accordance with 

the written agreement between the participating jurisdiction and the owner. Owners 

must annually provide the participating jurisdiction with information on rents and 

occupancy of HOME-assisted units to demonstrate compliance with this section. 

3. Any increase in rents for HOME-assisted units is subject to the provisions of 

outstanding leases, and in any event, the owner must provide tenants of those units 

not less than 30 days prior written notice before implementing any increase in rents. 

g. Adjustment of HOME rent limits for a particular project. 

1. Changes in fair market rents and in median income over time should be sufficient to 

maintain the financial viability of a project within the HOME rent limits in this 

section. 

2. HUD may adjust the HOME rent limits for a project, only if HUD finds that an 

adjustment is necessary to support the continued financial viability of the project 

and only by an amount that HUD determines is necessary to maintain continued 

financial viability of the project. HUD expects that this authority will be used 

sparingly. 

h. Tenant income. The income of each tenant must be determined initially in accordance 

with § 92.203(a)(1)(i). In addition, each year during the period of affordability the 

project owner must re-examine each tenant’s annual income in accordance with one of 

the options in § 92.203 selected by the participating jurisdiction. An owner of a 

multifamily project with an affordability period of 10 years or more who re-examines 

tenant’s annual income through a statement and certification in accordance with 

§ 92.203(a)(1)(ii), must examine the income of each tenant, in accordance with 

§ 92.203(a)(1)(i), every sixth year of the affordability period. Otherwise, an owner who 

accepts the tenant’s statement and certification in accordance with § 92.203(a)(1)(ii) is 

not required to examine the income of tenants in multifamily or single-family projects 

unless there is evidence that the tenant’s written statement failed to completely and 

accurately state information about the family’s size or income. 

i. Over-income tenants. 

1. HOME-assisted units continue to qualify as affordable housing despite a temporary 

noncompliance caused by increases in the incomes of existing tenants if actions 

satisfactory to HUD are being taken to ensure that all vacancies are filled in 

accordance with this section until the noncompliance is corrected. 

2. Tenants who no longer qualify as low-income families must pay as rent the lesser of 

the amount payable by the tenant under State or local law or 30 percent of the 

family’s adjusted income, except that tenants of HOME-assisted units that have 

been allocated low-income housing tax credits by a housing credit agency pursuant 

to section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42) must pay rent 

governed by section 42. In addition, in projects in which the HOME units are 

designated as floating pursuant to paragraph (j), tenants who no longer qualify as 

49
low-income are not required to pay as rent an amount that exceeds the market rent 

for comparable, unassisted units in the neighborhood. 

j. Fixed and floating HOME units. In a project containing HOME-assisted and other units, 

the participating jurisdiction may designate fixed or floating HOME units. This 

designation must be made at the time of project commitment. Fixed units remain the 

same throughout the period of affordability. Floating units are changed to maintain 

conformity with the requirements of this section during the period of affordability so that 

the total number of housing units meeting the requirements of this section remains the 

same, and each substituted unit is comparable in terms of size, features, and number of 

bedrooms to the originally designated HOME-assisted unit. 

§ 92.253 Tenant and Participant Protections 

a. Lease. The lease between a tenant and an owner of rental housing assisted with HOME 

funds must be for not less than one year, unless by mutual agreement between the tenant 

and the owner. 

b. Prohibited lease terms. The lease may not contain any of the following provisions: 

1. Agreement to be sued. Agreement by the tenant to be sued, to admit guilt, or to a 

judgment in favor of the owner in a lawsuit brought in connection with the lease; 

2. Treatment of property. Agreement by the tenant that the owner may take, hold, or 

sell personal property of household members without notice to the tenant and a 

court decision on the rights of the parties. This prohibition, however, does not apply 

to an agreement by the tenant concerning disposition of personal property remaining 

in the housing unit after the tenant has moved out of the unit. The owner may 

dispose of this personal property in accordance with State law; 

3. Excusing owner from responsibility. Agreement by the tenant not to hold the owner 

or the owner’s agents legally responsible for any action or failure to act, whether 

intentional or negligent; 

4. Waiver of notice. Agreement of the tenant that the owner may institute a lawsuit 

without notice to the tenant; 

5. Waiver of legal proceedings. Agreement by the tenant that the owner may evict the 

tenant or household members without instituting a civil court proceeding in which 

the tenant has the opportunity to present a defense, or before a court decision on the 

rights of the parties; 

6. Waiver of a jury trial. Agreement by the tenant to waive any right to a trial by jury; 

7. Waiver of right to appeal court decision. Agreement by the tenant to waive the 

tenant’s right to appeal, or to otherwise challenge in court, a court decision in 

connection with the lease; and 

8. Tenant chargeable with cost of legal actions regardless of outcome. Agreement by 

the tenant to pay attorney’s fees or other legal costs even if the tenant wins in a 

50
court proceeding by the owner against the tenant. The tenant, however, may be 

obligated to pay costs if the tenant loses. 

c. Termination of tenancy. An owner may not terminate the tenancy or refuse to renew the 

lease of a tenant of rental housing assisted with HOME funds except for serious or 

repeated violation of the terms and conditions of the lease; for violation of applicable 

Federal, State, or local law; for completion of the tenancy period for transitional housing; 

or for other good cause. To terminate or refuse to renew tenancy, the owner must serve 

written notice upon the tenant specifying the grounds for the action at least 30 days 

before the termination of tenancy. 

d. Tenant selection. An owner of rental housing assisted with HOME funds must adopt 

written tenant selection policies and criteria that: 

1. Are consistent with the purpose of providing housing for very low-income and lowincome families; 

2. Are reasonably related to program eligibility and the applicants’ ability to perform 

the obligations of the lease; 

3. Provide for the selection of tenants from a written waiting list in the chronological 

order of their application, insofar as is practicable; and 

4. Give prompt written notification to any rejected applicant of the grounds for any 

rejection. 

§ 92.254 Qualification as Affordable Housing: Homeownership 

a. Acquisition with or without rehabilitation. Housing that is for acquisition by a family 

must meet the affordability requirements of this paragraph (a). 

1. The housing must be single-family housing. 

2. The housing must be modest housing as follows: 

i. In the case of acquisition of newly constructed housing or standard housing, 

the housing has a purchase price for the type of single family housing that does 

not exceed 95 percent of the median purchase price for the area, as described 

in paragraph (a)(2)(iii) of this section. 

ii. In the case of acquisition with rehabilitation, the housing has an estimated 

value after rehabilitation that does not exceed 95 percent of the median 

purchase price for the area, described in paragraph (a)(2)(iii) of this section. 

iii. If a participating jurisdiction intends to use HOME funds for homebuyer 

assistance or for rehabilitation of owner-occupied single-family properties, the 

participating jurisdiction may use the Single Family Mortgage Limits under 

Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)) (which may 

be obtained from the HUD Field Office) or it may determine 95 percent of the 

median area purchase price for single family housing in the jurisdiction, as 

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follows. The participating jurisdiction must set forth the price for different 

types of single family housing for the jurisdiction. The 95 percent of median 

area purchase price must be established in accordance with a market analysis 

which ensured that a sufficient number of recent housing sales are included in 

the survey. Sales must cover the requisite number of months based on volume: 

For 500 or more sales per month, a one-month reporting period; for 250 

through 499 sales per month, a two-month reporting period; for less than 250 

sales per month, at least a three-month reporting period. The data must be 

listed in ascending order of sales price. The address of the listed properties 

must include the location within the participating jurisdiction. Lot, square and 

subdivision data may be substituted for the street address. The housing sales 

data must reflect all, or nearly all, of the one-family house sales in the entire 

participating jurisdiction. To determine the median, take the middle sale on the 

list if an odd number of sales and if an even number, take the higher of the 

middle numbers and consider it the median. After identifying the median sales 

price, the amount should be multiplied by .95 to determine the 95 percent of 

the median area purchase price. This information must be submitted to the 

HUD Field Office for review. 

3. The housing must be acquired by a homebuyer whose family qualifies as a lowincome family and the housing must be the principal residence of the family 

throughout the period described in paragraph (a)(4) of this section. 

4. Periods of affordability. The HOME-assisted housing must meet the affordability 

requirements for not less than the applicable period specified in the following table, 

beginning after project completion. The per unit amount of HOME funds and the 

affordability period that they trigger are described more fully in paragraphs (a)(5)(i) 

(resale) and (ii) (recapture) of this section. 

Homeownership assistance HOME amount 

per-unit Minimum period of affordability in years 

Under $15,000 5 

$15,000 to $40,000 10 

Over $40,000 15 

5. Resale and recapture. To ensure affordability, the participating jurisdiction must 

impose either resale or recapture requirements, at its option. The participating 

jurisdiction must establish the resale or recapture requirements that comply with the 

standards of this section and set forth the requirements in its consolidated plan. 

HUD must determine that they are appropriate. 

i. Resale. Resale requirements must ensure, if the housing does not continue to 

be the principal residence of the family for the duration of the period of 

affordability, that the housing is made available for subsequent purchase only 

to a buyer whose family qualifies as a low-income family and will use the 

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property as its principal residence. The resale requirement must also ensure 

that the price at resale provides the original HOME-assisted owner a fair return 

on investment (including the homeowner’s investment and any capital 

improvement) and ensure that the housing will remain affordable to a 

reasonable range of low-income homebuyers. The period of affordability is 

based on the total amount of HOME funds invested in the housing. 

A. Except as provided in paragraph (a)(5)(i)(B) of this section, deed 

restrictions, covenants running with the land, or other similar mechanisms 

must be used as the mechanism to impose the resale requirements. The 

affordability restrictions may terminate upon occurrence of any of the 

following termination events: foreclosure, transfer in lieu of foreclosure 

or assignment of an FHA insured mortgage to HUD. The participating 

jurisdiction may use purchase options, rights of first refusal or other 

preemptive rights to purchase the housing before foreclosure to preserve 

affordability. The affordability restrictions shall be revived according to 

the original terms if, during the original affordability period, the owner of 

record before the termination event, obtains an ownership interest in the 

housing. 

B. Certain housing may be presumed to meet the resale restrictions (i.e., the 

housing will be available and affordable to a reasonable range of lowincome homebuyers; a low-income homebuyer will occupy the housing as 

the family’s principal residence; and the original owner will be afforded a 

fair return on investment) during the period of affordability without the 

imposition of enforcement mechanisms by the participating jurisdiction. 

The presumption must be based upon a market analysis of the 

neighborhood in which the housing is located. The market analysis must 

include an evaluation of the location and characteristics of the housing 

and residents in the neighborhood (e.g., sale prices, age and amenities of 

the housing stock, incomes of residents, percentage of owner-occupants) 

in relation to housing and incomes in the housing market area. An 

analysis of the current and projected incomes of neighborhood residents 

for an average period of affordability for homebuyers in the neighborhood 

must support the conclusion that a reasonable range of low-income 

families will continue to qualify for mortgage financing. For example, an 

analysis shows that the housing is modestly priced within the housing 

market area and that families with incomes of 65% to 80% of area median 

can afford monthly payments under average FHA terms without other 

government assistance and housing will remain affordable at least during 

the next five to seven years compared to other housing in the market area; 

the size and amenities of the housing are modest and substantial 

rehabilitation will not significantly increase the market value; the 

neighborhood has housing that is not currently owned by the occupants, 

but the participating jurisdiction is encouraging homeownership in the 

neighborhood by providing homeownership assistance and by making 

improvements to the streets, sidewalks, and other public facilities and 

services. If a participating jurisdiction in preparing a neighborhood 

revitalization strategy under § 91.215(e)(2) of its consolidated plan or 

Empowerment Zone or Enterprise Community application under 24 CFR 

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part 597 has incorporated the type of market data described above, that 

submission may serve as the required analysis under this section. If the 

participating jurisdiction continues to provide homeownership assistance 

for housing in the neighborhood, it must periodically update the market 

analysis to verify the original presumption of continued affordability. 

ii. Recapture. Recapture provisions must ensure that the participating jurisdiction 

recoups all or a portion of the HOME assistance to the homebuyers, if the 

housing does not continue to be the principal residence of the family for the 

duration of the period of affordability. The participating jurisdiction may 

structure its recapture provisions based on its program design and market 

conditions. The period of affordability is based upon the total amount of 

HOME funds subject to recapture described in paragraph (a)(5)(ii)(A)(5) of 

this section. 

A. The following options for recapture requirements are acceptable to HUD. 

The participating jurisdiction may adopt, modify or develop its own 

recapture requirements for HUD approval. In establishing its recapture 

requirements, the participating jurisdiction is subject to the limitation that 

when the recapture requirement is triggered by a sale (voluntary or 

involuntary) of the housing unit, and there are no net proceeds or the net 

proceeds are insufficient to repay the HOME investment due, the 

participating jurisdiction can only recapture the net proceeds, if any. The 

net proceeds are the sales price minus superior loan repayment (other than 

HOME funds) and any closing costs. 

1. Recapture entire amount. The participating jurisdiction may 

recapture the entire amount of the HOME investment from the 

homeowner. 

2. Reduction during affordability period. The participating jurisdiction 

may reduce the HOME investment amount to be recaptured on a 

prorata basis for the time the homeowner has owned and occupied 

the housing measured against the required affordability period. 

3. Shared net proceeds. If the net proceeds are not sufficient to 

recapture the full HOME investment (or a reduced amount as 

provided for in paragraph (a)(5)(ii)(A)(2) of this section) plus enable 

the homeowner to recover the amount of the homeowner’s 

downpayment and any capital improvement investment made by the 

owner since purchase, the participating jurisdiction may share the net 

proceeds. The net proceeds are the sales price minus loan repayment 

(other than HOME funds) and closing costs. The net proceeds may 

be divided proportionally as set forth in the following mathematical 

formulas: 

54
HOME Investment/HOME Investment

 + homeowner investment × Net Proceeds = HOME amount to be 

recaptured 

 Homeowner Investment/HOME Investment 

 + homeowner investment 

× Net Proceeds = amount to homeowner 

4. Owner investment returned first. The participating jurisdiction may 

permit the homebuyer to recover the homebuyer’s entire investment 

(downpayment and capital improvements made by the owner since 

purchase) before recapturing the HOME investment. 

5. Amount subject to recapture. The HOME investment that is subject 

to recapture is based on the amount of HOME assistance that enabled 

the homebuyer to buy the dwelling unit. This includes any HOME 

assistance that reduced the purchase price from fair market value to 

an affordable price, but excludes the amount between the cost of 

producing the unit and the market value of the property (i.e., the 

development subsidy). The recaptured funds must be used to carry 

out HOME-eligible activities in accordance with the requirements of 

this part. If the HOME assistance is only used for the development 

subsidy and therefore not subject to recapture, the resale option must 

be used. 

6. Special considerations for single-family properties with more than 

one unit. If the HOME funds are only used to assist a low-income 

homebuyer to acquire one unit in single-family housing containing 

more than one unit and the assisted unit will be the principal 

residence of the homebuyer, the affordability requirements of this 

section apply only to the assisted unit. If HOME funds are also used 

to assist the low-income homebuyer to acquire one or more of the 

rental units in the single-family housing, the affordability 

requirements of § 92.252 apply to assisted rental units, except that 

the participating jurisdiction may impose resale or recapture 

restrictions on all assisted units (owner-occupied and rental units) in 

the single family housing. If resale restrictions are used, the 

affordability requirements on all assisted units continue for the 

period of affordability. If recapture restrictions are used, the 

affordability requirements on the assisted rental units may be 

terminated, at the discretion of the participating jurisdiction, upon 

recapture of the HOME investment. (If HOME funds are used to 

assist only the rental units in such a property then the requirements of 

§ 92.252 would apply and the owner-occupied unit would not be 

subject to the income targeting or affordability provisions of 

§ 92.254.) 

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7. Lease-purchase. HOME funds may be used to assist homebuyers 

through lease-purchase programs for existing housing and for 

housing to be constructed. The housing must be purchased by a 

homebuyer within 36 months of signing the lease-purchase 

agreement. The homebuyer must qualify as a low-income family at 

the time the lease-purchase agreement is signed. If HOME funds are 

used to acquire housing that will be resold to a homebuyer through a 

lease-purchase program, the HOME affordability requirements for 

rental housing in § 92.252 shall apply if the housing is not 

transferred to a homebuyer within forty-two months after project 

completion. 

8. Contract to purchase. If HOME funds are used to assist a homebuyer 

who has entered into a contract to purchase housing to be 

constructed, the homebuyer must qualify as a low-income family at 

the time the contract is signed. 

9. Preserving affordability. 

 (i) Notwithstanding § 92.214 (a)(6), to preserve the affordability of 

housing that was previously assisted with HOME funds and subject 

to the requirements of § 92.254(a), a participating jurisdiction may 

use additional HOME funds to acquire the housing through a 

purchase option, right of first refusal, or other preemptive right before 

foreclosure, or to acquire the housing at the foreclosure sale, to 

undertake any necessary rehabilitation, and to provide assistance to 

another homebuyer. The housing must be sold to a new eligible 

homebuyer in accordance with the requirements of § 92.254(a). 

Additional HOME funds may not be used if the mortgage in default 

was funded with HOME funds. 

 (ii) The total amount of original and additional HOME assistance 

may not exceed the maximum per-unit subsidy amount established 

under § 92.250. Alternatively to charging the cost to the HOME 

program under § 92.206, the participating jurisdiction may charge the 

cost to the HOME program under § 92.207, as a reasonable 

administrative cost of its HOME program, so that the additional 

HOME funds for the housing are not subject to the maximum per-unit 

subsidy amount. 

b. Rehabilitation not involving acquisition. Housing that is currently owned by a family 

qualifies as affordable housing only if: 

1. The estimated value of the property, after rehabilitation, does not exceed 95 percent 

of the median purchase price for the area, described in paragraph (a)(2)(iii) of this 

section; and 

2. The housing is the principal residence of an owner whose family qualifies as a lowincome family at the time HOME funds are committed to the housing. 

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c. Ownership interest. The ownership in the housing assisted under this section must meet 

the definition of “homeownership’’ in § 92.2. 

d. New construction without acquisition. Newly constructed housing that is built on 

property currently owned by a family which will occupy the housing upon completion, 

qualifies as affordable housing if it meets the requirements under paragraph (a) of this 

section. 

§ 92.255 Converting Rental Units to Homeownership Units for Existing Tenants 

The participating jurisdiction may permit the owner of HOME-assisted rental units to convert 

the rental units to homeownership units by selling, donating, or otherwise conveying the units 

to the existing tenants to enable the tenants to become homeowners in accordance with the 

requirements of § 92.254. If no additional HOME funds are used to enable the tenants to 

become homeowners, the homeownership units are subject to a minimum period of 

affordability equal to the remaining affordable period if the units continued as rental units. If 

additional HOME funds are used to directly assist the tenants to become homeowners, the 

minimum period of affordability is the affordability period under § 92.254(a)(4), based on the 

amount of direct homeownership assistance provided. 

§ 92.256 Reserved 

§ 92.257 Religious Organizations 

a. Organizations that are religious or faith-based are eligible, on the same basis as any other 

organization, to participate in the HOME program. Neither the federal government nor a 

state or local government receiving funds under HOME programs shall discriminate 

against an organization on the basis of the organization's religious character or affiliation. 

b. Organizations that are directly funded under the HOME program may not engage in 

inherently religious activities, such as worship, religious instruction, or proselytization, 

as part of the assistance funded under this part. If an organization conducts such 

activities, the activities must be offered separately, in time or location, from the 

assistance funded under this part, and participation must be voluntary for the 

beneficiaries of the assistance provided. 

c. A religious organization that participates in the HOME program will retain its 

independence from federal, state, and local governments, and may continue to carry out 

its mission, including the definition, practice, and expression of its religious beliefs, 

provided that it does not use direct HOME funds to support any inherently religious 

activities, such as worship, religious instruction, or proselytization. Among other things, 

faith-based organizations may use space in their facilities, without removing religious 

art, icons, scriptures, or other religious symbols. In addition, a HOME-funded religious 

organization retains its authority over its internal governance, and it may retain religious 

terms in its organization’s name, select its board members on a religious basis, and 

include religious references in its organization’s mission statements and other governing 

documents. 

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d. An organization that participates in the HOME program shall not, in providing program 

assistance, discriminate against a program beneficiary or prospective program 

beneficiary on the basis of religion or religious belief. 

e. HOME funds may not be used for the acquisition, construction, or rehabilitation of 

structures to the extent that those structures are used for inherently religious activities. 

HOME funds may be used for the acquisition, construction, or rehabilitation of structures 

only to the extent that those structures are used for conducting eligible activities under 

this part. Where a structure is used for both eligible and inherently religious activities, 

HOME funds may not exceed the cost of those portions of the acquisition, construction, 

or rehabilitation that are attributable to eligible activities in accordance with the cost 

accounting requirements applicable to HOME funds in this part. Sanctuaries, chapels, or 

other rooms that a HOME-funded religious congregation uses as its principal place of 

worship, however, are ineligible for HOME-funded improvements. Disposition of real 

property after the term of the grant, or any change in use of the property during the term 

of the grant, is subject to government-wide regulations governing real property 

disposition (see 24 CFR parts 84 and 85). 

f. If a state or local government voluntarily contributes its own funds to supplement 

federally funded activities, the state or local government has the option to segregate the 

federal funds or commingle them. However, if the funds are commingled, this section 

applies to all of the commingled funds. 

§ 92.258 Elder Cottage Housing Opportunity (ECHO) Units 

a. General. HOME funds may be used for the initial purchase and initial placement costs of 

elder cottage housing opportunity (ECHO) units that meet the requirements of this 

section, and that are small, free-standing, barrier-free, energy-efficient, removable, and 

designed to be installed adjacent to existing single-family dwellings. 

b. Eligible owners. The owner of a HOME-assisted ECHO unit may be: 

1. The owner-occupant of the single-family host property on which the ECHO unit 

will be located; 

2. A participating jurisdiction; or 

3. A non-profit organization. 

c. Eligible tenants. During the affordability period, the tenant of a HOME-assisted ECHO 

unit must be an elderly or disabled family as defined in 24 CFR 5.403 and must also be a 

low-income family. 

d. Applicable requirements. The requirements of § 92.252 of this part apply to HOMEassisted ECHO units, with the following modifications: 

1. Only one ECHO unit may be provided per host property. 

2. The ECHO unit owner may choose whether or not to charge the tenant of the ECHO 

unit rent, but if a rent is charged, it must meet the requirements of § 92.252. 

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3. The ECHO housing must remain affordable for the period specified in § 92.252(e). 

If within the affordability period the original occupant no longer occupies the unit, 

the ECHO unit owner must: 

i. Rent the unit to another eligible occupant on site; 

ii. Move the ECHO unit to another site for occupancy by an eligible occupant; or 

iii. If the owner of the ECHO unit is the host property owner-occupant, the owner 

may repay the HOME funds in accordance with the recapture provisions 

imposed by the participating jurisdiction consistent with § 92.254(a)(5)(ii). 

The participating jurisdiction must use the recaptured HOME funds for 

additional HOME activities. 

4. The participating jurisdiction has the responsibility to enforce the project 

requirements applicable to ECHO units. 

SUBPART G – COMMUNITY DEVELOPMENT HOUSING 

ORGANIZATIONS 

§ 92.300 Set-aside for Community Housing Development Organizations (CHDO) 

a. 

1. Within 24 months after HUD notifies the participating jurisdiction of HUD’s 

execution of the HOME Investment Partnerships Agreement, the participating 

jurisdiction must reserve not less than 15 percent of the HOME allocation for 

investment only in housing to be developed, sponsored, or owned by community 

housing development organizations. For a State, the HOME allocation includes 

funds reallocated under § 92.451(c)(2)(i) and, for a unit of general local 

government, funds transferred from a State under § 92.102(b). The funds are 

reserved when a participating jurisdiction enters into a written agreement with the 

community housing development organization. The funds must be provided to a 

community housing development organization, its subsidiary or a partnership of 

which it or its subsidiary is the managing general partner. If a CHDO owns the 

project in partnership, it or its wholly owned for-profit or non-profit subsidiary must 

be the managing general partner. In acting in any of the capacities specified, the 

community housing development organization must have effective project control. 

In addition, a community housing development organization, in connection with 

housing it develops, sponsors or owns with HOME funds provided under this 

section, may provide direct homeownership assistance (e.g. downpayment 

assistance) and not be considered a subrecipient. 

2. The participating jurisdiction determines the form of assistance, e.g., grant or loan, 

that the community housing development organization receives and whether any 

proceeds must be returned to the participating jurisdiction or may be retained by the 

community housing development organization. While the proceeds the participating 

jurisdiction permits the community housing development organization to retain are 

59
not subject to the requirements of this part, the participating jurisdiction must 

specify in the written agreement with the community housing development 

organization whether they are to be used for HOME-eligible or other housing 

activities to benefit low-income families. However, funds recaptured because 

housing no longer meets the affordability requirements under § 92.254(a)(5)(ii) are 

subject to the requirements of this part in accordance with § 92.503. 

b. Each participating jurisdiction must make reasonable efforts to identify community 

housing development organizations that are capable, or can reasonably be expected to 

become capable, of carrying out elements of the jurisdiction’s approved consolidated 

plan and to encourage such community housing development organizations to do so. If 

during the first 24 months of its participation in the HOME Program a participating 

jurisdiction cannot identify a sufficient number of capable community housing 

development organizations, up to 20 percent of the minimum community housing 

development organization setaside of 15 percent specified in paragraph (a) of this 

section, above, (but not more than $150,000 during the 24 month period) may be 

committed to develop the capacity of community housing development organizations in 

the jurisdiction. 

c. Up to 10 percent of the HOME funds reserved under this section may be used for 

activities specified under § 92.301. 

d. HOME funds required to be reserved under this section are subject to reduction, as 

provided in § 92.500(d). 

e. If funds for operating expenses are provided under § 92.208 to a community housing 

development organization that is not also receiving funds under paragraph (a) of this 

section for housing to be developed, sponsored or owned by the community housing 

development organization, the participating jurisdiction must enter into a written 

agreement with the community housing development organization that provides that the 

community housing development organization is expected to receive funds under 

paragraph (a) of this section within 24 months of receiving the funds for operating 

expenses, and specifies the terms and conditions upon which this expectation is based. 

f. Limitation on community housing development organization operating funds. A 

community housing development organization may not receive HOME funding for any 

fiscal year in an amount that provides more than 50 percent or $50,000, whichever is 

greater, of the community housing development organization’s total operating expenses 

in that fiscal year. This also includes organizational support and housing education 

provided under section 233(b)(1), (2), and (6) of the Act, as well as funds for operating 

expenses provided under § 92.208. 

§ 92.301 Project-specific Assistance to Community Housing Development 

Organizations 

a. Project-specific technical assistance and site control loans. 

1. General. Within the percentage specified in § 92.300(c), HOME funds may be used 

by a participating jurisdiction to provide technical assistance and site control loans 

60
to community housing development organizations in the early stages of site 

development for an eligible project. These loans may not exceed amounts that the 

participating jurisdiction determines to be customary and reasonable project 

preparation costs allowable under paragraph (a)(2) of this section. All costs must be 

related to a specific eligible project or projects. 

2. Allowable costs. A loan may be provided to cover project costs necessary to 

determine project feasibility (including costs of an initial feasibility study), 

consulting fees, costs of preliminary financial applications, legal fees, architectural 

fees, engineering fees, engagement of a development team, option to acquire 

property, site control and title clearance. General operational expenses of the 

community housing development organization are not allowable costs. 

3. Repayment. The community housing development organization must repay the loan 

to the participating jurisdiction from construction loan proceeds or other project 

income. The participating jurisdiction may waive repayment of the loan, in part or 

in whole, if there are impediments to project development that the participating 

jurisdiction determines are reasonably beyond the control of the borrower. 

b. Project-specific seed money loans. 

1. General. Within the percentage specified in § 92.300(c), HOME funds may be used 

to provide loans to community housing development organizations to cover 

preconstruction project costs that the participating jurisdiction determines to be 

customary and reasonable, including, but not limited to the costs of obtaining firm 

construction loan commitments, architectural plans and specifications, zoning 

approvals, engineering studies, and legal fees. 

2. Eligible sponsors. A loan may be provided only to a community housing 

development organization that has, with respect to the project concerned, site 

control (evidenced by a deed, a sales contract, or an option contract to acquire the 

property), a preliminary financial commitment, and a capable development team. 

3. Repayment. The community housing development organization must repay the loan 

to the participating jurisdiction from construction loan proceeds or other project 

income. The participating jurisdiction may waive repayment of the loan, in whole or 

in part, if there are impediments to project development that the participating 

jurisdiction determines are reasonably beyond the control of the community housing 

development organization. 

§ 92.302 Housing Education and Organizational Support 

HUD is authorized to provide education and organizational support assistance, in conjunction 

with HOME funds made available to community housing development organizations in 

accordance with section 233 of the Act. HUD will publish a notice in the Federal Register 

announcing the availability of funding under this section, as appropriate. The notice need not 

include funding for each of the eligible activities, but may target funding from among the 

eligible activities. 

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§ 92.303 Tenant Participation Plan 

A community housing development organization that receives assistance under this part must 

adhere to a fair lease and grievance procedure approved by the participating jurisdiction and 

provide a plan for and follow a program of tenant participation in management decisions. 

SUBPART H – OTHER FEDERAL REQUIREMENTS 

§ 92.350 Other Federal Requirements 

a. The Federal requirements set forth in 24 CFR part 5, subpart A, are applicable to 

participants in the HOME program. The requirements of this subpart include: 

nondiscrimination and equal opportunity; disclosure requirements; debarred, suspended 

or ineligible contractors; and drug-free workplace. 

b. The nondiscrimination requirements at section 282 of the Act are applicable. These 

requirements are waived in connection with the use of HOME funds on lands set aside 

under the Hawaiian Homes Commission Act, 1920 (42 Stat.108). 

§ 92.351 Affirmative Marketing; Minority Outreach Program 

a. Affirmative marketing. 

1. Each participating jurisdiction must adopt affirmative marketing procedures and 

requirements for rental and homebuyer projects containing 5 or more HOMEassisted housing units. Affirmative marketing steps consist of actions to provide 

information and otherwise attract eligible persons in the housing market area to the 

available housing without regard to race, color, national origin, sex, religion, 

familial status or disability. (The affirmative marketing procedures do not apply to 

families with Section 8 tenant-based rental housing assistance or families with 

tenant-based rental assistance provided with HOME funds.) 

2. The affirmative marketing requirements and procedures adopted must include: 

i. Methods for informing the public, owners, and potential tenants about Federal 

fair housing laws and the participating jurisdiction’s affirmative marketing 

policy (e.g., the use of the Equal Housing Opportunity logotype or slogan in 

press releases and solicitations for owners, and written communication to fair 

housing and other groups); 

ii. Requirements and practices each owner must adhere to in order to carry out the 

participating jurisdiction’s affirmative marketing procedures and requirements 

(e.g., use of commercial media, use of community contacts, use of the Equal 

Housing Opportunity logotype or slogan, and display of fair housing poster); 

iii. Procedures to be used by owners to inform and solicit applications from 

persons in the housing market area who are not likely to apply for the housing 

without special outreach (e.g., use of community organizations, places of 

62
worship, employment centers, fair housing groups, or housing counseling 

agencies); 

iv. Records that will be kept describing actions taken by the participating 

jurisdiction and by owners to affirmatively market units and records to assess 

the results of these actions; and 

v. A description of how the participating jurisdiction will annually assess the 

success of affirmative marketing actions and what corrective actions will be 

taken where affirmative marketing requirements are not met. 

3. A State that distributes HOME funds to units of general local government must 

require each unit of general local government to adopt affirmative marketing 

procedures and requirements that meet the requirement in paragraphs (a) and (b) of 

this section. 

b. Minority outreach. A participating jurisdiction must prescribe procedures acceptable to 

HUD to establish and oversee a minority outreach program within its jurisdiction to 

ensure the inclusion, to the maximum extent possible, of minorities and women, and 

entities owned by minorities and women, including, without limitation, real estate firms, 

construction firms, appraisal firms, management firms, financial institutions, investment 

banking firms, underwriters, accountants, and providers of legal services, in all contracts 

entered into by the participating jurisdiction with such persons or entities, public and 

private, in order to facilitate the activities of the participating jurisdiction to provide 

affordable housing authorized under this Act or any other Federal housing law applicable 

to such jurisdiction. Section 85.36(e) of this title describes actions to be taken by a 

participating jurisdiction to assure that minority business enterprises and women 

business enterprises are used when possible in the procurement of property and services. 

§ 92.352 Environmental Review 

a. General. The environmental effects of each activity carried out with HOME funds must 

be assessed in accordance with the provisions of the National Environmental Policy Act 

of 1969 (NEPA) and the related authorities listed in HUD’s implementing regulations at 

24 CFR parts 50 and 58. 

b. Responsibility for review. 

1. The jurisdiction (e.g., the participating jurisdiction or State recipient) or insular area 

must assume responsibility for environmental review, decisionmaking, and action 

for each activity that it carries out with HOME funds, in accordance with the 

requirements imposed on a recipient under 24 CFR part 58. No funds may be 

committed to a HOME activity or project before the completion of the 

environmental review and approval of the request for release of funds and related 

certification, except as authorized by 24 CFR part 58. 

2. A State participating jurisdiction must also assume responsibility for approval of 

requests for release of HOME funds submitted by State recipients. 

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3. HUD will perform the environmental review, in accordance with 24 CFR part 50, 

for a competitively awarded application for HOME funds submitted to HUD by an 

entity that is not a jurisdiction. 

§ 92.353 Displacement, Relocation, and Acquisition 

a. Minimizing displacement. Consistent with the other goals and objectives of this part, the 

participating jurisdiction must ensure that it has taken all reasonable steps to minimize 

the displacement of persons (families, individuals, businesses, nonprofit organizations, 

and farms) as a result of a project assisted with HOME funds. To the extent feasible, 

residential tenants must be provided a reasonable opportunity to lease and occupy a 

suitable, decent, safe, sanitary, and affordable dwelling unit in the building/complex 

upon completion of the project. 

b. Temporary relocation. The following policies cover residential tenants who will not be 

required to move permanently but who must relocate temporarily for the project. Such 

tenants must be provided: 

1. Reimbursement for all reasonable out-of-pocket expenses incurred in connection 

with the temporary relocation, including the cost of moving to and from the 

temporarily occupied housing and any increase in monthly rent/utility costs. 

2. Appropriate advisory services, including reasonable advance written notice of: 

i. The date and approximate duration of the temporary relocation; 

ii. The location of the suitable, decent, safe, and sanitary dwelling to be made 

available for the temporary period; 

iii. The terms and conditions under which the tenant may lease and occupy a 

suitable, decent, safe, and sanitary dwelling in the building/complex upon 

completion of the project; and 

iv. The provisions of paragraph (b)(1) of this section. 

c. Relocation assistance for displaced persons. 

1. General. A displaced person (defined in paragraph (c)(2) of this section) must be 

provided relocation assistance at the levels described in, and in accordance with the 

requirements of the Uniform Relocation Assistance and Real Property Acquisition 

Policies Act of 1970 (URA) (42 U.S.C. 4201-4655) and 49 CFR part 24. A 

“displaced person” must be advised of his or her rights under the Fair Housing Act 

and, if the comparable replacement dwelling used to establish the amount of the 

replacement housing payment to be provided to a minority person is located in an 

area of minority concentration, the minority person also must be given, if possible, 

referrals to comparable and suitable, decent, safe, and sanitary replacement 

dwellings not located in such areas. 

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2. Displaced Person. 

i. For purposes of paragraph (c) of this section, the term displaced person means 

a person (family individual, business, nonprofit organization, or farm, 

including any corporation, partnership or association) that moves from real 

property or moves personal property from real property, permanently, as a 

direct result of acquisition, rehabilitation, or demolition for a project assisted 

with HOME funds. This includes any permanent, involuntary move for an 

assisted project, including any permanent move from the real property that is 

made: 

A. After notice by the owner to move permanently from the property, if the 

move occurs on or after: 

1. The date of the submission of an application to the participating 

jurisdiction or HUD, if the applicant has site control and the 

application is later approved; or 

2. The date the jurisdiction approves the applicable site, if the applicant 

does not have site control at the time of the application; or 

B. Before the date described in paragraph (c)(2)(i)(A) of this section, if the 

jurisdiction or HUD determines that the displacement resulted directly 

from acquisition, rehabilitation, or demolition for the project; or 

C. By a tenant-occupant of a dwelling unit, if any one of the following three 

situations occurs: 

1. The tenant moves after execution of the agreement covering the 

acquisition, rehabilitation, or demolition and the move occurs before 

the tenant is provided written notice offering the tenant the 

opportunity to lease and occupy a suitable, decent, safe, and sanitary 

dwelling in the same building/complex upon completion of the 

project under reasonable terms and conditions. Such reasonable 

terms and conditions must include a term of at least one year at a 

monthly rent and estimated average monthly utility costs that do not 

exceed the greater of: 

i. The tenant’s monthly rent before such agreement and estimated 

average monthly utility costs; or 

ii. The total tenant payment, as determined under 24 CFR 5.613, if 

the tenant is low-income, or 30 percent of gross household 

income, if the tenant is not low-income; or 

2. The tenant is required to relocate temporarily, does not return to the 

building/complex, and either: 

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i. The tenant is not offered payment for all reasonable out-ofpocket expenses incurred in connection with the temporary 

relocation; or 

ii. Other conditions of the temporary relocation are not reasonable; 

or 

3. The tenant is required to move to another dwelling unit in the same 

building/complex but is not offered reimbursement for all reasonable 

out-of-pocket expenses incurred in connection with the move, or 

other conditions of the move are not reasonable. 

ii. Notwithstanding paragraph (c)(2)(i) of this section, a person does not qualify 

as a displaced person if: 

A. The person has been evicted for cause based upon a serious or repeated 

violation of the terms and conditions of the lease or occupancy agreement, 

violation of applicable federal, State or local law, or other good cause, and 

the participating jurisdiction determines that the eviction was not 

undertaken for the purpose of evading the obligation to provide relocation 

assistance. The effective date of any termination or refusal to renew must 

be preceded by at least 30 days advance written notice to the tenant 

specifying the grounds for the action. 

B. The person moved into the property after the submission of the 

application but, before signing a lease and commencing occupancy, was 

provided written notice of the project, its possible impact on the person 

(e.g., the person may be displaced, temporarily relocated, incur a rent 

increase), and the fact that the person would not qualify as a “displaced 

person” (or for any assistance under this section) as a result of the project; 

C. The person is ineligible under 49 CFR 24.2(g)(2); or 

D. HUD determines that the person was not displaced as a direct result of 

acquisition, rehabilitation, or demolition for the project. 

iii. The jurisdiction may, at any time, ask HUD to determine whether a 

displacement is or would be covered by this rule. 

3. Initiation of negotiations. For purposes of determining the formula for computing 

replacement housing assistance to be provided under paragraph (c) of this section to 

a tenant displaced from a dwelling as a direct result of private-owner rehabilitation, 

demolition or acquisition of the real property, the term initiation of negotiations 

means the execution of the agreement covering the acquisition, rehabilitation, or 

demolition. 

d. Optional relocation assistance. The participating jurisdiction may provide relocation 

payments and other relocation assistance to families, individuals, businesses, nonprofit 

organizations, and farms displaced by a project assisted with HOME funds where the 

displacement is not subject to paragraph (c) of this section. The jurisdiction may also 

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provide relocation assistance to persons covered under paragraph (c) of this section 

beyond that required. For any such assistance that is not required by State or local law, 

the jurisdiction must adopt a written policy available to the public that describes the 

optional relocation assistance that it has elected to furnish and provides for equal 

relocation assistance within each class of displaced persons. 

e. Residential antidisplacement and relocation assistance plan. The participating 

jurisdiction shall comply with the requirements of 24 CFR part 42, subpart C. 

f. Real property acquisition requirements. The acquisition of real property for a project is 

subject to the URA and the requirements of 49 CFR part 24, subpart B. 

g. Appeals. A person who disagrees with the participating jurisdiction’s determination 

concerning whether the person qualifies as a displaced person, or the amount of 

relocation assistance for which the person may be eligible, may file a written appeal of 

that determination with the jurisdiction. A low-income person who is dissatisfied with 

the jurisdiction’s determination on his or her appeal may submit a written request for 

review of that determination to the HUD Field Office. 

§ 92.354 Labor 

a. General. 

1. Every contract for the construction (rehabilitation or new construction) of housing 

that includes 12 or more units assisted with HOME funds must contain a provision 

requiring the payment of not less than the wages prevailing in the locality, as 

predetermined by the Secretary of Labor pursuant to the Davis-Bacon Act (40 

U.S.C. 276a-276a-5), to all laborers and mechanics employed in the development of 

any part of the housing. Such contracts must also be subject to the overtime 

provisions, as applicable, of the Contract Work Hours and Safety Standards Act (40 

U.S.C. 327-332). 

2. The contract for construction must contain these wage provisions if HOME funds 

are used for any project costs in § 92.206, including construction or nonconstruction 

costs, of housing with 12 or more HOME-assisted units. When HOME funds are 

only used to assist homebuyers to acquire single-family housing, and not for any 

other project costs, the wage provisions apply to the construction of the housing if 

there is a written agreement with the owner or developer of the housing that HOME 

funds will be used to assist homebuyers to buy the housing and the construction 

contract covers 12 or more housing units to be purchased with HOME assistance. 

The wage provisions apply to any construction contract that includes a total of 12 or 

more HOME-assisted units, whether one or more than one project is covered by the 

construction contract. Once they are determined to be applicable, the wage 

provisions must be contained in the construction contract so as to cover all laborers 

and mechanics employed in the development of the entire project, including 

portions other than the assisted units. Arranging multiple construction contracts 

within a single project for the purpose of avoiding the wage provisions is not 

permitted. 

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3. Participating jurisdictions, contractors, subcontractors, and other participants must 

comply with regulations issued under these acts and with other Federal laws and 

regulations pertaining to labor standards and HUD Handbook 1344.1 (Federal 

Labor Standards Compliance in Housing and Community Development Programs), 

as applicable. Participating jurisdictions must require certification as to compliance 

with the provisions of this section before making any payment under such contract. 

b. Volunteers. The prevailing wage provisions of paragraph (a) of this section do not apply 

to an individual who receives no compensation or is paid expenses, reasonable benefits, 

or a nominal fee to perform the services for which the individual volunteered and who is 

not otherwise employed at any time in the construction work. See 24 CFR part 70. 

c. Sweat equity. The prevailing wage provisions of paragraph (a) of this section do not 

apply to members of an eligible family who provide labor in exchange for acquisition of 

a property for homeownership or provide labor in lieu of, or as a supplement to, rent 

payments. 

§ 92.355 Lead-based paint 

Housing assisted with HOME funds is subject to the Lead-Based Paint Poisoning Prevention 

Act (42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 

(42 U.S.C. 4851-4856), and implementing regulations at part 35, subparts A, B, J, K, M and R 

of this title. 

[64 FR 50224, Sept. 15, 1999] 

§ 92.356 Conflict of Interest 

a. Applicability. In the procurement of property and services by participating jurisdictions, 

State recipients, and subrecipients, the conflict of interest provisions in 24 CFR 85.36 

and 24 CFR 84.42, respectively, apply. In all cases not governed by 24 CFR 85.36 and 

24 CFR 84.42, the provisions of this section apply. 

b. Conflicts prohibited. No persons described in paragraph (c) of this section who exercise 

or have exercised any functions or responsibilities with respect to activities assisted with 

HOME funds or who are in a position to participate in a decisionmaking process or gain 

inside information with regard to these activities, may obtain a financial interest or 

benefit from a HOME-assisted activity, or have an interest in any contract, subcontract or 

agreement with respect thereto, or the proceeds thereunder, either for themselves or those 

with whom they have family or business ties, during their tenure or for one year 

thereafter. 

c. Persons covered. The conflict of interest provisions of paragraph (b) of this section apply 

to any person who is an employee, agent, consultant, officer, or elected official or 

appointed official of the participating jurisdiction, State recipient, or subrecipient which 

are receiving HOME funds. 

d. Exceptions: Threshold requirements. Upon the written request of the participating 

jurisdiction, HUD may grant an exception to the provisions of paragraph (b) of this 

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section on a case-by-case basis when it determines that the exception will serve to further 

the purposes of the HOME Investment Partnerships Program and the effective and 

efficient administration of the participating jurisdiction’s program or project. An 

exception may be considered only after the participating jurisdiction has provided the 

following: 

1. A disclosure of the nature of the conflict, accompanied by an assurance that there 

has been public disclosure of the conflict and a description of how the public 

disclosure was made; and 

2. An opinion of the participating jurisdiction’s or State recipient’s attorney that the 

interest for which the exception is sought would not violate State or local law. 

e. Factors to be considered for exceptions. In determining whether to grant a requested 

exception after the participating jurisdiction has satisfactorily met the requirements of 

paragraph (d) of this section, HUD will consider the cumulative effect of the following 

factors, where applicable: 

1. Whether the exception would provide a significant cost benefit or an essential 

degree of expertise to the program or project which would otherwise not be 

available; 

2. Whether the person affected is a member of a group or class of low-income persons 

intended to be the beneficiaries of the assisted activity, and the exception will 

permit such person to receive generally the same interests or benefits as are being 

made available or provided to the group or class; 

3. Whether the affected person has withdrawn from his or her functions or 

responsibilities, or the decisionmaking process with respect to the specific assisted 

activity in question; 

4. Whether the interest or benefit was present before the affected person was in a 

position as described in paragraph (c) of this section; 

5. Whether undue hardship will result either to the participating jurisdiction or the 

person affected when weighed against the public interest served by avoiding the 

prohibited conflict; and 

6. Any other relevant considerations. 

f. Owners and Developers. 

1. No owner, developer or sponsor of a project assisted with HOME funds (or officer, 

employee, agent or consultant of the owner, developer or sponsor) whether private, 

for profit or non-profit (including a community housing development organization 

(CHDO) when acting as an owner, developer or sponsor) may occupy a HOMEassisted affordable housing unit in a project. This provision does not apply to an 

individual who receives HOME funds to acquire or rehabilitate his or her principal 

residence or to an employee or agent of the owner or developer of a rental housing 

project who occupies a housing unit as the project manager or maintenance worker. 

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2. Exceptions. Upon written request of a housing owner or developer, the participating 

jurisdiction (or State recipient, if authorized by the State participating jurisdiction) 

may grant an exception to the provisions of paragraph (f)(1) of this section on a 

case-by-case basis when it determines that the exception will serve to further the 

purposes of the HOME program and the effective and efficient administration of the 

owner’s or developer’s HOME-assisted project. In determining whether to grant a 

requested exception, the participating jurisdiction shall consider the following 

factors: 

i. Whether the person receiving the benefit is a member of a group or class of 

low-income persons intended to be the beneficiaries of the assisted housing, 

and the exception will permit such person to receive generally the same 

interests or benefits as are being made available or provided to the group or 

class; 

ii. Whether the person has withdrawn from his or her functions or responsibilities, 

or the decision making process with respect to the specific assisted housing in 

question; 

iii. Whether the tenant protection requirements of § 92.253 are being observed; 

iv. Whether the affirmative marketing requirements of § 92.351 are being 

observed and followed; and 

v. Any other factor relevant to the participating jurisdiction’s determination, 

including the timing of the requested exception. 

§ 92.357 Executive Order 12372 

a. General. Executive Order 12372, as amended by Executive Order 12416 (3 CFR, 1982 

Comp., p. 197 and 3 CFR, 1983 Comp., p. 186) (Intergovernmental Review of Federal 

Programs) and HUD’s implementing regulations at 24 CFR part 52, allow each State to 

establish its own process for review and comment on proposed Federal financial 

assistance programs. 

b. Applicability. Executive Order 12372 applies to applications submitted with respect to 

HOME funds being competitively reallocated under subpart J of this part to units of 

general local government. 

§ 92.358 Consultant Activities 

No person providing consultant services in an employer-employee type relationship shall 

receive more than a reasonable rate of compensation for personal services paid with HOME 

funds. In no event, however, shall such compensation exceed the limits in effect under the 

provisions of any applicable statute (e.g., annual HUD appropriations acts which have set the 

limit at the equivalent of the daily rate paid for Level IV of the Executive Schedule, see the 

Departments of Veterans Affairs and Housing and Urban Development, and Independent 

Agencies Appropriations Act, 1997, Pub. L. 104-204 (September 26, 1996)). Such services 

shall be evidenced by written agreements between the parties which detail the responsibilities, 

70
standards, and compensation. Consultant services provided under an independent contractor 

relationship are not subject to the compensation limitation of Level IV of the Executive 

Schedule. 

SUBPART I – TECHNICAL ASSISTANCE 

§ 92.400 Coordinated Federal Support for Housing Strategies 

a. General. HUD will provide assistance in accordance with Subtitle C of the Act. 

b. Notice of funding. HUD will publish a notice in the Federal Register announcing the 

availability of funding under this section as appropriate. 

SUBPART J – REALLOCATIONS 

§ 92.450 General 

a. This subpart J sets out the conditions under which HUD reallocates HOME funds that 

have been allocated, reserved, or placed in a HOME Investment Trust Fund. 

b. A jurisdiction that is not a participating jurisdiction but is meeting the requirements of 

§§ 92.102, 92.103, and 92.104, (participation threshold, notice of intent, and submission 

of consolidated plan) is treated as a participating jurisdiction for purposes of receiving a 

reallocation under subpart J of this part. 

§ 92.451 Reallocation of HOME Funds from a Jurisdiction that Is Not Designated a 

Participating Jurisdiction or Has Its Designation Revoked 

a. Failure to be designated a participating jurisdiction. HUD will reallocate, under this 

section, any HOME funds allocated to or reserved for a jurisdiction that is not a 

participating jurisdiction if: 

1. HUD determines that the jurisdiction has failed to: 

i. Meet the participation threshold amount in § 92.102; 

ii. Provide notice of its intent to become a participating jurisdiction in accordance 

with § 92.103; or 

iii. Submit its consolidated plan, in accordance with 24 CFR part 91; or 

2. HUD after providing for amendments and resubmissions in accordance with 24 

CFR part 91 disapproves the jurisdiction’s consolidated plan. 

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b. Designation revoked. HUD will reallocate, under this section, any funds remaining in a 

jurisdiction’s HOME Investment Trust Fund after HUD has revoked the jurisdiction’s 

designation as a participating jurisdiction under § 92.107. 

c. Manner of reallocation. HUD will reallocate funds that are subject to reallocation under 

this section in the following manner: 

1. If the funds to be reallocated under this section are from a State, HUD will: 

i. Make the funds available by competition in accordance with criteria in 

§ 92.453 among applications submitted by units of general local government 

within the State and with preference being given to applications from units of 

general local government that are not participating jurisdictions, and 

ii. Reallocate the remainder by formula in accordance with § 92.454. 

2. If the funds to be reallocated are from a unit of general local government: 

i. Located in a State that is participating jurisdiction, HUD will reallocate the 

funds to that State. The State, in distributing these funds, must give preference 

to the provision of affordable housing within the unit of general local 

government; or 

ii. Located in a State that is not a participating jurisdiction, HUD will reallocate 

the funds by competition among units of general local government and 

community housing development organizations within the State, with priority 

going to applications for affordable housing within the unit of general local 

government; and reallocate the remainder by formula in accordance with 

§ 92.454. 

§ 92.452 Reallocation of Community Housing Development Organization Set-aside 

HUD will reallocate, under this section, any HOME funds reduced or recaptured by HUD 

from a participating jurisdiction’s HOME Investment Trust Fund under § 92.300(d). HUD 

will reallocate these funds by competition in accordance with criteria in § 92.453 to other 

participating jurisdictions for affordable housing developed, sponsored, or owned by 

community housing development organizations. 

§ 92.453 Criteria for Competitive Reallocations 

a. HUD will invite applications through FEDERAL REGISTER publication of a Notice of 

Funding Availability (NOFA), in accordance with section 102 of the Department of 

Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3545) and the 

requirements of sec. 217(c) of the Cranston-Gonzalez National Affordable Housing Act 

(42 U.S.C. 12747(c)), for HOME funds that become available for competitive 

reallocation under § 92.451 or § 92.452, or both. The NOFA will describe the application 

requirements and procedures, including the total funding available for the competition 

and any maximum amount of individual awards. The NOFA will also describe the 

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selection criteria and any special factors to be evaluated in awarding points under the 

selection criteria. 

b. The NOFA will include the selection criteria at sec. 217(c) of the Cranston-Gonzalez 

National Affordable Housing Act (42 U.S.C. 12747(c)), with the following maximum 

number of points awarded for each category of criteria: 

1. Commitment. Up to 25 points for the criteria at sec. 217(c)(1) of the CranstonGonzalez National Affordable Housing Act (42 U.S.C. 12747(c)(1)); 

2. Actions. Up to 50 points for the criteria at sec. 217(c)(2) of the Cranston-Gonzalez 

National Affordable Housing Act (42 U.S.C. 12747(c)(2)); and 

3. Policies. Up to 25 points for the criteria at sec. 217(c)(3) of the Cranston-Gonzalez 

National Affordable Housing Act (42 U.S.C. 12747(c)(3)). 

§ 92.454 Reallocations by Formula 

a. HUD will reallocate under this section: 

1. Any HOME funds remaining available for reallocation after HUD has made 

competitive reallocations under § 92.451 and § 92.452; 

2. Any HOME funds available for reallocation because HUD reduced or recaptured 

funds from participating jurisdiction under § 92.500(d) for failure to commit the 

funds within the time specified; 

3. Any HOME funds withdrawn by HUD from a participating jurisdiction under 24 

CFR 91.520(f) for failure to submit in a timely manner a performance report 

required by 24 CFR 91.520 that is satisfactory to HUD; and 

4. Any HOME funds remitted to HUD under § 92.503(b) when a jurisdiction ceases to 

be a participating jurisdiction. 

b. Any reallocation of funds from a State must be made only among all participating States, 

and any reallocation of funds from units of general local government must be made only 

among all participating units of general local government, except those participating 

jurisdictions that HUD has removed from participating in reallocations under § 92.552. 

c. A local participating jurisdiction’s share of a reallocation is calculated by multiplying the 

amount available for reallocation to units of general local government by a factor that is 

that ratio of the participating jurisdiction’s formula allocation provided under § 92.50 to 

the total of the formula allocations provided for all local participating jurisdictions 

sharing in the reallocation. A State participating jurisdiction’s share is comparably 

determined using the amount available for reallocation to States. 

d. HUD will make reallocations under this section quarterly, unless the amount available 

for such reallocation is insufficient to warrant making a reallocation. In any event, HUD 

will make a reallocation under this section at least once a year. The minimum amount of 

a reallocation is $1000. 

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SUBPART K – PROGRAM ADMINISTRATION 

§ 92.500 The HOME Investment Trust Fund 

a. General. A HOME Investment Trust Fund consists of the accounts described in this 

section solely for investment in accordance with the provisions of this part. HUD will 

establish a HOME Investment Trust Fund United States Treasury account for each 

participating jurisdiction. Each participating jurisdiction may use either a separate local 

HOME Investment Trust Fund account or, a subsidiary account within its general fund 

(or other appropriate fund) as the local HOME Investment Trust Fund account. 

b. Treasury Account. The United States Treasury account of the HOME Investment Trust 

Fund includes funds allocated to the participating jurisdiction under § 92.50 (including 

for a local participating jurisdiction, any transfer of the State’s allocation pursuant to 

§ 92.102(b)(2)) and funds reallocated to the participating jurisdiction, either by formula 

or by competition, under subpart J of this part; and 

c. Local Account. 

1. The local account of the HOME Investment Trust Fund includes deposits of HOME 

funds disbursed from the Treasury account; the deposit of any State funds (other 

than HOME funds transferred pursuant to § 92.102(b)(2)) or local funds that enable 

the jurisdiction to meet the participating threshold amount in § 92.102; any program 

income (from both the allocated funds and matching contributions in accordance 

with the definition of program income); and any repayments or recaptured funds as 

required by § 92.503. 

2. The participating jurisdiction may establish a second local account of the HOME 

Investment Trust Funds if: 

i. The participating jurisdiction has its own affordable housing trust fund that the 

participating jurisdiction will use for matching contributions to the HOME 

program; 

ii. The statute or local ordinance requires repayments from its own trust fund to 

be made to the trust fund; 

iii. The participating jurisdiction establishes a separate account within its own 

trust fund for repayments of the matching contributions; and 

iv. The funds in the account are used solely for investment in eligible activities 

within the participating jurisdiction’s boundaries in accordance with the 

provisions of this part, except as provided under § 92.201(a)(2). 

3. The funds in the local account cannot be used for the matching contribution and do 

not need to be matched. 

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d. 

1. Reductions. HUD will reduce or recapture HOME funds in the HOME Investment 

Trust Fund by the amount of: 

A. Any funds in the United States Treasury account that are required to be 

reserved (i.e., 15 percent of the funds) by a participating jurisdiction 

under § 92.300 that are not reserved for a community housing 

development organization pursuant to a written agreement within 24 

months after the last day of the month in which HUD notifies the 

participating jurisdiction of HUD’s execution of the HOME Investment 

Partnership Agreement; 

B. Any funds in the United States Treasury account that are not committed 

within 24 months after the last day of the month in which HUD notifies 

the participating jurisdiction of HUD’s execution of the HOME 

Investment Partnership Agreement; 

C. Any funds in the United States Treasury account that are not expended 

within five years after the last day of the month in which HUD notifies 

the participating jurisdiction of HUD’s execution of the HOME 

Investment Partnership Agreement; and 

D. Any penalties assessed by HUD under § 92.552 of this part. 

2. For purposes of determining the amount by which the HOME Investment Trust 

Fund will be reduced or recaptured under paragraphs (d)(1)(A), (B) and (C), HUD 

will consider the sum of commitments to CHDOs, commitments, or expenditures, as 

applicable, from the fiscal year allocation being examined from and from 

subsequent allocations. This sum must be equal to or greater than the amount of the 

fiscal year allocation being examined, or in the case of commitments to CHDOs, 15 

percent of that fiscal year allocation. 

§ 92.501 HOME Investment Partnership Agreement 

Allocated and reallocated funds will be made available pursuant to a HOME Investment 

Partnership Agreement. The agreement ensures that HOME funds invested in affordable 

housing are repayable if the housing ceases to qualify as affordable housing before the period 

of affordability expires. 

§ 92.502 Program Disbursement and Information System 

a. General. The HOME Investment Trust Fund account established in the United States 

Treasury is managed through a computerized disbursement and information system 

established by HUD. The system disburses HOME funds that are allocated or 

reallocated, and collects and reports information on the use of HOME funds in the 

United States Treasury account. [For purposes of reporting in the Integrated 

Disbursement and Information System, a HOME project is an activity.] 

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b. Project set-up. 

1. After the participating jurisdiction executes the HOME Investment Partnership 

Agreement, submits the applicable banking and security documents, complies with 

the environmental requirements under 24 CFR part 58 for release of funds and 

commits funds to a specific local project, the participating jurisdiction may identify 

(set up) specific investments in the disbursement and information system. 

Investments that require the set-up of projects in the system are the acquisition, new 

construction, or rehabilitation of housing, and the provision of tenant-based rental 

assistance. The participating jurisdiction is required to enter complete project set-up 

information at the time of project set-up. 

2. If the project set-up information is not completed within 20 days of the project setup call, the project may be canceled by the system. In addition, a project which has 

been committed in the system for 12 months without an initial disbursement of 

funds may be canceled by the system. 

c. Disbursement of HOME funds. 

1. After complete project set-up information is entered into the disbursement and 

information system, HOME funds for the project may be drawn down from the 

United States Treasury account by the participating jurisdiction by electronic funds 

transfer. The funds will be deposited in the local account of the HOME Investment 

Trust Fund of the participating jurisdiction within 48 to 72 hours of the 

disbursement request. Any drawdown of HOME funds from the United States 

Treasury account is conditioned upon the provision of satisfactory information by 

the participating jurisdiction about the project or tenant-based rental assistance and 

compliance with other procedures, as specified by HUD. 

2. HOME funds drawn from the United States Treasury account must be expended for 

eligible costs within 15 days. Any interest earned within the 15 day period may be 

retained by the participating jurisdiction as HOME funds. Any funds that are drawn 

down and not expended for eligible costs within 15 days of the disbursement must 

be returned to HUD for deposit in the participating jurisdiction’s United States 

Treasury account of the HOME Investment Trust Fund. Interest earned after 15 

days belongs to the United States and must be remitted promptly, but at least 

quarterly, to HUD, except that a local participating jurisdiction may retain interest 

amounts up to $100 per year for administrative expenses and States are subject to 

the Intergovernmental Cooperation Act (31 U.S.C. 6501 et seq.). 

3. HOME funds in the local account of the HOME Investment Trust Fund must be 

disbursed before requests are made for HOME funds in the United States Treasury 

account. 

4. A participating jurisdiction will be paid on an advance basis provided it complies 

with the requirements of this part. 

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d. Project completion. 

1. Complete project completion information must be entered into the disbursement and 

information system, or otherwise provided, within 120 days of the final project 

drawdown. If satisfactory project completion information is not provided, HUD 

may suspend further project set-ups or take other corrective actions. 

2. Additional HOME funds may be committed to a project up to one year after project 

completion, but the amount of HOME funds in the project may not exceed the 

maximum per-unit subsidy amount established under § 92.250. 

e. Access by other participants. Access to the disbursement and information system by 

other entities participating in the HOME program (e.g., State recipients) will be governed 

by procedures established by HUD. 

§ 92.503 Program Income, Repayments, and Recaptured Funds 

a. Program income. 

1. Program income must be used in accordance with the requirements of this part. 

Program income must be deposited in the participating jurisdiction’s HOME 

Investment Trust Fund local account unless the participating jurisdiction permits the 

State recipient or subrecipient to retain the program income for additional HOME 

projects pursuant to the written agreement required by § 92.504. 

2. If the jurisdiction is not a participating jurisdiction when the program income is 

received, the funds are not subject to the requirements of this part. 

3. Program income derived from consortium activities undertaken by or within a 

member unit of general local government which thereafter terminates its 

participation in the consortium continues to be program income of the consortium. 

b. Repayments. 

1. Any HOME funds invested in housing that does not meet the affordability 

requirements for the period specified in § 92.252 or § 92.254, as applicable, must be 

repaid by the participating jurisdiction in accordance with paragraph (b)(3) of this 

section. 

2. Any HOME funds invested in a project that is terminated before completion, either 

voluntarily or otherwise, must be repaid by the participating jurisdiction in 

accordance with paragraph (b)(3) of this section except for repayments of project 

specific community housing development organization loans which are waived in 

accordance with §§ 92.301(a)(3) and 92.301(b)(3). 

3. If the HOME funds were disbursed from the participating jurisdiction’s HOME 

Investment Trust Fund Treasury account, they must be repaid to the Treasury 

account. If the HOME funds were disbursed from the participating jurisdiction’s 

HOME Investment Trust Fund local account, they must be repaid to the local 

account. If the jurisdiction is not a participating jurisdiction when the repayment is 

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made, the funds must be remitted to HUD and reallocated in accordance with 

§ 92.454. 

c. Recaptures. HOME funds recaptured in accordance with § 92.254(a)(5)(ii) must be used 

in accordance with the requirements of this part. Recaptured funds must be deposited in 

the participating jurisdiction’s HOME Investment Trust Fund local account unless the 

participating jurisdiction permits the State recipient, subrecipient, or community housing 

development organization to retain the recaptured funds for additional HOME projects 

pursuant to the written agreement required by § 92.504. If the jurisdiction is not a 

participating jurisdiction when the recaptured funds are received, the funds must be 

remitted to HUD and reallocated in accordance with § 92.454. 

§ 92.504 Participating Jurisdiction Responsibilities; Written Agreements; On-site 

Inspection 

a. Responsibilities. The participating jurisdiction is responsible for managing the day to day 

operations of its HOME program, ensuring that HOME funds are used in accordance 

with all program requirements and written agreements, and taking appropriate action 

when performance problems arise. The use of State recipients, subrecipients, or 

contractors does not relieve the participating jurisdiction of this responsibility. The 

performance of each contractor and subrecipient must be reviewed at least annually. 

b. Executing a written agreement. Before disbursing any HOME funds to any entity, the 

participating jurisdiction must enter into a written agreement with that entity. Before 

disbursing any HOME funds to any entity, a State recipient, subrecipient, or contractor 

which is administering all or a part of the HOME program on behalf of the participating 

jurisdiction, must also enter into a written agreement with that entity. The written 

agreement must ensure compliance with the requirements of this part. 

c. Provisions in written agreements. The contents of the agreement may vary depending 

upon the role the entity is asked to assume or the type of project undertaken. This section 

details basic requirements by role and the minimum provisions that must be included in a 

written agreement. 

1. State recipient. The provisions in the written agreement between the State and a 

State recipient will depend on the program functions that the State specifies the 

State recipient will carry out in accordance with § 92.201(b). 

i. Use of the HOME funds. The agreement must describe the use of the HOME 

funds, including the tasks to be performed, a schedule for completing the tasks, 

and a budget. These items must be in sufficient detail to provide a sound basis 

for the State to effectively monitor performance under the agreement. 

ii. Affordability. The agreement must require housing assisted with HOME funds 

to meet the affordability requirements of § 92.252 or § 92.254, as applicable, 

and must require repayment of the funds if the housing does not meet the 

affordability requirements for the specified time period. 

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iii. Program income. The agreement must state if program income is to be 

remitted to the State or to be retained by the State recipient for additional 

eligible activities. 

iv. Uniform administrative requirements. The agreement must require the State 

recipient to comply with applicable uniform administrative requirements, as 

described in § 92.505. 

v. Project requirement. The agreement must require compliance with project 

requirements in subpart F of this part, as applicable in accordance with the 

type of project assisted. 

vi. Other program requirements. The agreement must require the State recipient 

to carry out each activity in compliance with all Federal laws and regulations 

described in subpart H of this part, except that the State recipient does not 

assume the State’s responsibilities for release of funds under § 92.352 and the 

intergovernmental review process in § 92.357 does not apply to the State 

recipient. 

vii. Affirmative marketing. The agreement must specify the State recipient’s 

affirmative marketing responsibilities in accordance with § 92.351, if the 

HOME funds received by the State recipient will be used for housing 

containing five or more assisted units. 

viii. Requests for disbursement of funds. The agreement must specify that the State 

recipient may not request disbursement of HOME funds under this agreement 

until the funds are needed for payment of eligible costs. The amount of each 

request must be limited to the amount needed. Program income must be 

disbursed before the State recipient requests funds from the State. 

ix. Records and reports. The agreement must specify the particular records that 

must be maintained and the information or reports that must be submitted in 

order to assist the State in meeting its recordkeeping and reporting 

requirements. 

x. Enforcement of the agreement. The agreement must provide for a means of 

enforcement of affordable housing requirements by the State or the intended 

beneficiaries, if the State recipient will be the owner at project completion of 

the affordable housing. The means of enforcement may include liens on real 

property, deed restrictions, or covenants running with the land. The 

affordability requirements in § 92.252 must be enforced by deed restriction. In 

addition, the agreement must specify remedies for breach of the HOME 

requirements. The agreement must specify that, in accordance with 24 CFR 

85.43, suspension or termination may occur if the State recipient materially 

fails to comply with any term of the agreement. The State may permit the 

agreement to be terminated for convenience in accordance with 24 CFR 85.44. 

xi. If the State recipient provides funds to for-profit owners or developers, 

nonprofit owners or developers, subrecipients, homeowners, homebuyers, 

tenants receiving tenant-based rental assistance, or contractors who are 

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providing services to the State recipient, the State recipient must have a written 

agreement with such entities which meets the requirements of this section. 

xii. Duration of the agreement. The duration of the agreement will depend on 

which functions the State recipient performs (e.g., whether the State recipient 

or the State has responsibility for monitoring rental projects for the period of 

affordability) and which activities are funded under the agreement. 

2. Subrecipient. A subrecipient is a public agency or nonprofit selected by the 

participating jurisdiction to administer all or a portion of the participating 

jurisdiction’s HOME Program. The agreement between the participating jurisdiction 

and the subrecipient must include: 

i. Use of the HOME funds. The agreement must describe the use of the HOME 

funds, including the tasks to be performed, a schedule for completing the tasks, 

a budget, and the period of the agreement. These items must be in sufficient 

detail to provide a sound basis for the participating jurisdiction effectively to 

monitor performance under the agreement. 

ii. Program income. The agreement must state if program income is to be 

remitted to the participating jurisdiction or to be retained by the subrecipient 

for additional eligible activities. 

iii. Uniform administrative requirements. The agreement must require the 

subrecipient to comply with applicable uniform administrative requirements, 

as described in § 92.505. 

iv. Other program requirements. The agreement must require the subrecipient to 

carry out each activity in compliance with all Federal laws and regulations 

described in subpart H of this part, except that the subrecipient does not 

assume the participating jurisdiction’s responsibilities for environmental 

review under § 92.352 and the intergovernmental review process in § 92.357 

does not apply. 

v. Affirmative marketing. The agreement must specify the subrecipient’s 

affirmative marketing responsibilities in accordance with § 92.351, if the 

HOME funds administered by the subrecipient will be used for housing 

containing five or more assisted units. 

vi. Requests for disbursement of funds. The agreement must specify that the 

subrecipient may not request disbursement of funds under the agreement until 

the funds are needed for payment of eligible costs. The amount of each request 

must be limited to the amount needed. Program income must be disbursed 

before the subrecipient requests funds from the participating jurisdiction. 

vii. Reversion of assets. The agreement must specify that upon expiration of the 

agreement, the subrecipient must transfer to the participating jurisdiction any 

HOME funds on hand at the time of expiration and any accounts receivable 

attributable to the use of HOME funds. 

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viii. Records and reports. The agreement must specify the particular records that 

must be maintained and the information or reports that must be submitted in 

order to assist the participating jurisdiction in meeting its recordkeeping and 

reporting requirements. 

ix. Enforcement of the agreement. The agreement must specify remedies for 

breach of the provisions of the agreement. The agreement must specify that, in 

accordance with 24 CFR 85.43, suspension or termination may occur if the 

subrecipient materially fails to comply with any term of the agreement. The 

participating jurisdiction may permit the agreement to be terminated for 

convenience in accordance with 24 CFR 85.44. 

x. 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 have a written agreement which meets the requirements of 

this section. 

3. For-profit or nonprofit housing owner, sponsor or developer (other than singlefamily owner-occupant). 

i. Use of the HOME funds. The agreement between the participating jurisdiction 

and a for-profit or non-profit housing owner, sponsor or developer must 

describe the use of the HOME funds, including the tasks to be performed, a 

schedule for completing the tasks, and a budget. These items must be in 

sufficient detail to provide a sound basis for the participating jurisdiction to 

effectively monitor performance under the agreement. 

ii. Affordability. The agreement must require housing assisted with HOME funds 

to meet the affordability requirements of § 92.252 or § 92.254, as applicable, 

and must require repayment of the funds if the housing does not meet the 

affordability requirements for the specified time period. If the owner or 

developer is undertaking rental projects, the agreement must establish the 

initial rents and the procedures for rent increases. If the owner or developer is 

undertaking homeownership projects for sale to homebuyers in accordance 

with § 92.254(a),the agreement must set forth the resale or recapture 

requirements which must be imposed on the housing. 

iii. Project requirements. The agreement must require compliance with project 

requirements in subpart F of this part, as applicable in accordance with the 

type of project assisted. 

iv. Property standards. The agreement must require the housing to meet the 

property standards in § 92.251 and the lead-based paint requirements in part 

35, subparts A, B, J, K, M and R of this title, upon project completion. The 

agreement must also require owners of rental housing assisted with HOME 

funds to maintain the housing in compliance with § 92.251 for the duration of 

the affordability period. 

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v. Other program requirements. The agreement must require the owner, 

developer or sponsor to carry out each project in compliance with the 

following requirements of subpart H of this part: 

A. If the project contains 5 or more HOME-assisted units, the agreement 

must specify the owner or developer’s affirmative marketing 

responsibilities as enumerated by the participating jurisdiction in 

accordance with § 92.351. 

B. The federal requirements and nondiscrimination established in § 92.350. 

C. Any displacement, relocation, and acquisition requirements imposed by 

the participating jurisdiction consistent with § 92.353. 

D. The labor requirements in § 92.354. 

E. The conflict of interest provisions prescribed in § 92.356(f). 

vi. Records and reports. The agreement must specify the particular records that 

must be maintained and the information or reports that must be submitted in 

order to assist the participating jurisdiction in meeting its recordkeeping and 

reporting requirements. 

vii. Enforcement of the agreement. The agreement must provide for a means of 

enforcement of the affordable housing requirements by the participating 

jurisdiction or the intended beneficiaries. This means of enforcement may 

include liens on real property, deed restrictions or covenants running with the 

land. The affordability requirements in § 92.252 must be enforced by deed 

restriction. In addition, the agreement must specify remedies for breach of the 

provisions of the agreement. 

viii. Requests for disbursement of funds. The agreement must specify that the 

developer may not request disbursement of funds under the agreement until the 

funds are needed for payment of eligible costs. The amount of each request 

must be limited to the amount needed. 

ix. Duration of the agreement. The agreement must specify the duration of the 

agreement. If the housing assisted under this agreement is rental housing, the 

agreement must be in effect through the affordability period required by the 

participating jurisdiction under § 92.252. If the housing assisted under this 

agreement is homeownership housing, the agreement must be in effect at least 

until completion of the project and ownership by the low-income family. 

x. Community housing development organization provisions. If the nonprofit 

owner or developer is a community housing development organization and is 

using set-aside funds under § 92.300, the agreement must include the 

appropriate provisions under §§ 92.300 and 92.301. 

4. Contractor. The participating jurisdiction selects a contractor through applicable 

procurement procedures and requirements. The contractor provides goods or 

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services in accordance with a written agreement (the contract). For contractors who 

are administering all or a portion of the HOME program, the contract must include 

at a minimum the following provisions: 

i. Use of the HOME funds. The agreement must describe the use of the HOME 

funds, including the tasks to be performed, a schedule for completing the tasks, 

a budget, and the length of the agreement. 

ii. Program requirements. The agreement must provide that the contractor is 

subject to the requirements in Part 92 that are applicable to the participating 

jurisdiction, except §§ 92.505 and 92.506 do not apply, and the contractor 

cannot assume the participating jurisdiction responsibilities for environmental 

review, decisionmaking, and action under § 92.352. Where the contractor is 

administering only a portion of the program, the agreement must list the 

requirements applicable to the activities the contractor is administering. 

iii. Duration of agreement. The agreement must specify the duration of the 

contract. Generally, the duration of a contract should not exceed two years. 

5. Homebuyer, homeowner or tenant receiving tenant-based rental or security deposit 

assistance. When a participating jurisdiction provides assistance to a homebuyer, 

homeowner or tenant the written agreement may take many forms depending upon 

the nature of assistance. As appropriate, it must include as a minimum: 

i. For homebuyers, the agreement must conform to the requirements in 

§ 92.254(a), the value of the property, principal residence, lease-purchase, if 

applicable, and the resale or recapture provisions. The agreement must specify 

the amount of HOME funds, the form of assistance, e.g., grant, amortizing 

loan, deferred payment loan, the use of the funds (e.g., down-payment, closing 

costs, rehabilitation) and the time by which the housing must be acquired. 

ii. For homeowners, the agreement must conform to the requirements in 

§ 92.254(b) and specify the amount and form of HOME assistance, 

rehabilitation work to be undertaken, date for completion, and property 

standards to be met. 

iii. For tenants, the rental assistance contract or the security deposit contract must 

conform to §§ 92.209 and 92.253. 

d. On site inspections. 

1. HOME assisted rental housing. During the period of affordability, the participating 

jurisdiction must perform on-site inspections of HOME-assisted rental housing to 

determine compliance with the property standards of § 92.251 and to verify the 

information submitted by the owners in accordance with the requirements of 

§ 92.252 no less than: every three years for projects containing 1 to 4 units; every 

two years for projects containing 5 to 25 units; and every year for projects 

containing 26 or more units. Inspections must be based on a sufficient sample of 

units. 

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2. Tenant-based rental assistance. The participating jurisdiction must perform annual 

on-site inspections of rental housing occupied by tenants receiving HOME-assisted 

TBRA to determine compliance with the property standards of § 92.251. 

§ 92.505 Applicability of Uniform Administrative Requirements 

a. Governmental entities. The requirements of OMB Circular No. A-87 and the following 

requirements of 24 CFR part 85 apply to the participating jurisdiction, State recipients, 

and any governmental subrecipient receiving HOME funds: §§ 85.6, 85.12, 85.20, 85.22, 

85.26, 85.32-85.34, 85.36, 85.44, 85.51, and 85.52. 

b. Non-profit organizations. The requirements of OMB Circular No. A-122 and the 

following requirements of 24 CFR part 84 apply to subrecipients receiving HOME funds 

that are nonprofit organizations that are not governmental subrecipients: §§ 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. 

c. OMB Circulars referenced in this part may be obtained from: Executive Office of the 

President, Publication Service, 725 17th Street, N.W., Suite G-2200, Washington, DC 

20503; telephone: (202) 395-7332. 

§ 92.506 Audit 

Audits of the participating jurisdiction, State recipients, and subrecipients must be conducted 

in accordance with 24 CFR 84.26 and 85.26. 

§ 92.507 Closeout 

HOME funds will be closed out in accordance with procedures established by HUD. 

§ 92.508 Recordkeeping 

a. General. Each participating jurisdiction must establish and maintain sufficient records to 

enable HUD to determine whether the participating jurisdiction has met the requirements 

of this part. At a minimum, the following records are needed: 

1. Records concerning designation as a participating jurisdiction. 

i. For a consortium, the consortium agreement among the participating member 

units of general local government as required by § 92.101. 

ii. For a unit of general local government receiving a formula allocation of less 

than $750,000 (or less than $500,000 in fiscal years in which Congress 

appropriates less than $1.5 billion for this part), records demonstrating that 

funds have been made available (either by the State or the unit of general local 

government, or both) equal to or greater than the difference between its 

formula allocation and $750,000 (or $500,000 in fiscal years in which 

Congress appropriates less than $1.5 billion) as required by § 92.102(b). 

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2. Program records. 

i. Records of the efforts to maximize participation by the private sector as 

required by § 92.200. 

ii. The forms of HOME assistance used in the program, including any forms of 

investment described in the Consolidated Plan under 24 CFR part 91 which are 

not identified in § 92.205(b). 

iii. The subsidy layering guidelines adopted in accordance with § 92.250 which 

support the participating jurisdiction’s Consolidated Plan certification. 

iv. If existing debt is refinanced for multi-family rehabilitation projects, the 

refinancing guidelines established in accordance with § 92.206(b), described in 

the Consolidated Plan. 

v. If HOME funds are used for tenant-based rental assistance, records supporting 

the participating jurisdiction’s Consolidated Plan certification in accordance 

with 92.209(b), including documentation of the local market conditions that 

led to the choice of this option; written selection policies and criteria; 

supporting documentation for preferences for specific categories of individuals 

with disabilities; and records supporting the rent standard and minimum tenant 

contribution established in accordance with § 92.209(h). 

vi. If HOME funds are used for tenant-based rental assistance or rental housing, 

records evidencing that not less than 90 percent of the families receiving such 

rental assistance meet the income requirements of § 92.216. 

vii. If HOME funds are used for homeownership housing, the procedures used for 

establishing 95 percent of the median purchase price for the area in accordance 

with § 92.254(a)(2), in the Consolidated Plan. 

viii. If HOME funds are used for acquisition of housing for homeownership, the 

resale or recapture guidelines established in accordance with § 92.254(a)(5), in 

the Consolidated Plan. 

ix. Records demonstrating compliance with the matching requirements of 

§ 92.218 through § 92.222 including a running log and project records 

documenting the type and amount of match contributions by project. 

x. Records documenting compliance with the 24 month commitment deadline of 

§ 92.500(d). 

xi. Records demonstrating compliance with the fifteen percent CHDO set-aside 

requirement of § 92.300(a). 

xii. Records documenting compliance with the ten percent limitation on 

administrative and planning costs in accordance with § 92.207. 

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3. Project records. 

i. A full description of each project assisted with HOME funds, including the 

location, form of HOME assistance, and the units or tenants assisted with 

HOME funds. 

ii. The source and application of funds for each project, including supporting 

documentation in accordance with 24 CFR 85.20. 

iii. Records demonstrating that each rental housing or homeownership project 

meets the minimum per-unit subsidy amount of § 92.205(c), the maximum 

per-unit subsidy amount of § 92.250(a) and the subsidy layering guidelines 

adopted in accordance with § 92.250(b). 

iv. Records demonstrating that each project meets the property standards of 

§ 92.251 and the lead based paint requirements of § 92.355. 

v. Records demonstrating that each family is income eligible in accordance with 

§ 92.203. 

vi. Records demonstrating that each tenant-based rental assistance project meets 

the written tenant selection policies and criteria of § 92.209(c), including the 

tenant preference requirements, the rent reasonableness requirements of 

§ 92.209(f), the maximum subsidy provisions of § 92.209(h), HQS inspection 

reports, and calculation of the HOME subsidy. 

vii. Records demonstrating that each rental housing project meets the affordability 

and income targeting requirements of § 92.252 for the required period. 

Records must be kept for each family assisted. 

viii. Records demonstrating that each multifamily rental housing project involving 

rehabilitation with refinancing complies with the refinancing guidelines 

established in accordance with § 92.206(b). 

ix. Records demonstrating that each lease for a tenant receiving tenant-based 

rental assistance and for an assisted rental housing unit complies with the 

tenant and participant protections of § 92.253. Records must be kept for each 

family. 

x. Records demonstrating that the purchase price or estimated value after 

rehabilitation for each homeownership housing project does not exceed 95 

percent of the median purchase price for the area in accordance with 

§ 92.254(a)(2). The records must demonstrate how the estimated value was 

determined. 

xi. Records demonstrating that each homeownership project meets the 

affordability requirements of § 92.254 for the required period. 

xii. Records demonstrating that any pre-award costs charged to the HOME 

allocation meet the requirements of § 92.212. 

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xiii. Records demonstrating that a site and neighborhood standards review was 

conducted for each project which includes new construction of rental housing 

assisted under this part to determine that the site meets the requirements of 24 

CFR 983.6(b), in accordance with § 92.202. 

4. Community Housing Development Organizations (CHDOs) Records. 

i. Written agreements reserving HOME funds to CHDOs in accordance with 

§ 92.300(a). 

ii. Records setting forth the efforts made to identify and encourage CHDOs, as 

required by § 92.300(b). 

iii. The name and qualifications of each CHDO and amount of HOME CHDO setaside funds reserved and committed. 

iv. Records demonstrating that each CHDO complies with the written agreements 

required by § 92.504. 

v. Records concerning the use of CHDO setaside funds, including funds used to 

develop CHDO capacity pursuant to § 92.300(b). 

vi. Records concerning the use of funds for CHDO operating expenses and 

demonstrating compliance with the requirements of § 92.208, § 92.300(e) and 

§ 92.300(f). 

vii. Records concerning the tenant participation plan required by § 92.303. 

viii. Records concerning project-specific assistance to CHDOs pursuant to 

§ 92.301, including the impediments to repayment, if repayment is waived. 

5. Financial records. 

i. Records identifying the source and application of funds for each fiscal year, 

including the formula allocation, any reallocation (identified by federal fiscal 

year appropriation), and any State or local funds provided under § 92.102(b). 

ii. Records concerning the HOME Investment Trust Fund Treasury account and 

local account required to be established and maintained by § 92.500, including 

deposits, disbursements, balances, supporting documentation and any other 

information required by the program disbursement and information system 

established by HUD. 

iii. Records identifying the source and application of program income, repayments 

and recaptured funds. 

iv. Records demonstrating adequate budget control, in accordance with 24 CFR 

85.20, including evidence of periodic account reconciliations. 

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6. Program administration records. 

i. Records demonstrating compliance with the written agreements required by 

§ 92.504. 

ii. Records demonstrating compliance with the applicable uniform administrative 

requirements required by § 92.505. 

iii. Records documenting required inspections, monitoring reviews and audits, and 

the resolution of any findings or concerns. 

7. Records concerning other Federal requirements. 

i. Equal opportunity and fair housing records. 

A. Data on the extent to which each racial and ethnic group and singleheaded households (by gender of household head) have applied for, 

participated in, or benefited from, any program or activity funded in 

whole or in part with HOME funds. 

B. Documentation of actions undertaken to meet the requirements of 24 CFR 

Part 135 which implements section 3 of the Housing Development Act of 

1968, as amended (12 U.S.C. 1701u). 

C. Documentation of the actions the participating jurisdiction has taken to 

affirmatively further fair housing. 

ii. Affirmative marketing and MBE/WBE records. 

A. Records demonstrating compliance with the affirmative marketing 

procedures and requirements of § 92.351. 

B. Documentation and data on the steps taken to implement the jurisdiction’s 

outreach programs to minority-owned (MBE) and female-owned (WBE) 

businesses including data indicating the racial/ethnic or gender character 

of each business entity receiving a contract or subcontract of $25,000 or 

more paid, or to be paid, with HOME funds; the amount of the contract or 

subcontract, and documentation of participating jurisdiction’s affirmative 

steps to assure that minority business and women’s business enterprises 

have an equal opportunity to obtain or compete for contracts and 

subcontracts as sources of supplies, equipment, construction, and services. 

iii. Records demonstrating compliance with the environmental review 

requirements of § 92.352 and 24 CFR part 58, including flood insurance 

requirements. 

iv. Records demonstrating compliance with the requirements of § 92.353 

regarding displacement, relocation, and real property acquisition, including 

project occupancy lists identifying the name and address of all persons 

occupying the real property on the date described in § 92.353(c)(2)(i)(A), 

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moving into the property on or after the date described in § 92.353(c)(2)(i)(A), 

and occupying the property upon completion of the project. 

v. Records demonstrating compliance with the labor requirements of § 92.354, 

including contract provisions and payroll records. 

vi. Records demonstrating compliance with the lead-based paint requirements of 

part 35, subparts A, B, J, K, M and R of this title. 

vii. Records supporting exceptions to the conflict of interest prohibition pursuant 

to § 92.356. 

viii. Debarment and suspension certifications required by 24 CFR parts 24 and 91. 

ix. Records concerning intergovernmental review, as required by § 92.357. 

b. States with State Recipients. A State that distributes HOME funds to State recipients 

must require State recipients to keep the records required by paragraphs (a)(2), (a)(3), 

(a)(5), (a)(6) and (a)(7) of this section, and such other records as the State determines to 

be necessary to enable the State to carry out its responsibilities under this part. The State 

need not duplicate the records kept by the State recipients. The State must keep records 

concerning its review of State recipients required under § 92.201(b)(3). 

c. Period of record retention. All records pertaining to each fiscal year of HOME funds 

must be retained for the most recent five year period, except as provided below. 

1. For rental housing projects, records may be retained for five years after the project 

completion date; except that records of individual tenant income verifications, 

project rents and project inspections must be retained for the most recent five year 

period, until five years after the affordability period terminates. 

2. For homeownership housing projects, records may be retained for five years after 

the project completion date, except for documents imposing recapture/resale 

restrictions which must be retained for five years after the affordability period 

terminates. 

3. For tenant-based rental assistance projects, records must be retained for five years 

after the period of rental assistance terminates. 

4. Written agreements must be retained for five years after the agreement terminates. 

5. Records covering displacements and acquisition must be retained for five years after 

the date by which all persons displaced from the property and all persons whose 

property is acquired for the project have received the final payment to which they 

are entitled in accordance with § 92.353. 

6. If any litigation, claim, negotiation, audit, monitoring, inspection or other action has 

been started before the expiration of the required record retention period records 

must be retained until completion of the action and resolution of all issues which 

arise from it, or until the end of the required period, whichever is later. 

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d. Access to records. 

1. The participating jurisdiction must provide citizens, public agencies, and other 

interested parties with reasonable access to records, consistent with applicable state 

and local laws regarding privacy and obligations of confidentiality. 

2. HUD and the Comptroller General of the United States, any of their representatives, 

have the right of access to any pertinent books, documents, papers or other records 

of the participating jurisdiction, state recipients, and subrecipients, in order to make 

audits, examinations, excerpts, and transcripts. 

§ 92.509 Performance Reports 

a. Management reports. Each participating jurisdiction must submit management reports on 

its HOME Investment Partnerships Program in such format and at such time as HUD 

may prescribe. 

b. Annual performance report. For annual performance report requirements, see 24 CFR 

part 91. 

SUBPART L – PERFORMANCE REVIEWS AND SANCTIONS 

§ 92.550 Performance Reviews 

a. General. HUD will review the performance of each participating jurisdiction in carrying 

out its responsibilities under this part whenever determined necessary by HUD, but at 

least annually. In conducting performance reviews, HUD will rely primarily on 

information obtained from the participating jurisdiction’s and, as appropriate, the State 

recipient’s records and reports, findings from on-site monitoring, audit reports, and 

information generated from the disbursement and information system established by 

HUD. Where applicable, HUD may also consider relevant information pertaining to a 

participating jurisdiction’s or State recipient’s performance gained from other sources, 

including citizen comments, complaint determinations, and litigation. Reviews to 

determine compliance with specific requirements of this part will be conducted as 

necessary, with or without prior notice to the participating jurisdiction or State recipient. 

Comprehensive performance reviews under the standards in paragraph (b) of this section 

will be conducted after prior notice to the participating jurisdiction. 

b. Standards for comprehensive performance review. A participating jurisdiction’s 

performance will be comprehensively reviewed periodically, as prescribed by HUD, to 

determine: 

1. For local participating jurisdictions and State participating jurisdictions 

administering their own HOME programs, whether the participating jurisdiction has 

committed the HOME funds in the United States Treasury account as required by 

§ 92.500 and expended the funds in the United States Treasury account as required 

by § 92.500, and has met the requirements of this part, particularly eligible 

activities, income targeting, affordability, and matching requirements; or 

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2. For State participating jurisdictions distributing HOME funds to State recipients, 

whether the State has met the matching contribution and other requirements of this 

part; has distributed the funds in accordance with the requirements of this part; and 

has made such reviews and audits of its State recipients as may be appropriate to 

determine whether they have satisfied the requirements of paragraph (b)(1) of this 

section. 

§ 92.551 Corrective and Remedial Actions 

a. General. HUD will use the procedures in this section in conducting the performance 

review as provided in § 92.550 and in taking corrective and remedial actions. 

b. Performance review. 

1. If HUD determines preliminarily that the participating jurisdiction has not met a 

requirement of this part, the participating jurisdiction will be given notice of this 

determination and an opportunity to demonstrate, within the time prescribed by 

HUD (not to exceed 30 days) and on the basis of substantial facts and data, that it 

has done so. 

2. If the participating jurisdiction fails to demonstrate to HUD’s satisfaction that it has 

met the requirement, HUD will take corrective or remedial action in accordance 

with this section or § 92.552. 

c. Corrective and remedial actions. Corrective or remedial actions for a performance 

deficiency (failure to meet a provision of this part) will be designed to prevent a 

continuation of the deficiency; mitigate, to the extent possible, its adverse effects or 

consequences; and prevent its recurrence. 

1. HUD may instruct the participating jurisdiction to submit and comply with 

proposals for action to correct, mitigate and prevent a performance deficiency, 

including: 

i. Preparing and following a schedule of actions for carrying out the affected 

activities, consisting of schedules, timetables, and milestones necessary to 

implement the affected activities; 

ii. Establishing and following a management plan that assigns responsibilities for 

carrying out the remedial actions; 

iii. Canceling or revising activities likely to be affected by the performance 

deficiency, before expending HOME funds for the activities; 

iv. Reprogramming HOME funds that have not yet been expended from affected 

activities to other eligible activities; 

v. Reimbursing its HOME Investment Trust Fund in any amount not used in 

accordance with the requirements of this part; 

vi. Suspending disbursement of HOME funds for affected activities; and 

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vii. Making matching contributions as draws are made from the participating 

jurisdiction’s HOME Investment Trust Fund United States Treasury Account. 

2. HUD may also change the method of payment from an advance to reimbursement 

basis; and take other remedies that may be legally available. 

§ 92.552 Notice and Opportunity for Hearing; Sanctions 

a. If HUD finds after reasonable notice and opportunity for hearing that a participating 

jurisdiction has failed to comply with any provision of this part and until HUD is 

satisfied that there is no longer any such failure to comply: 

1. HUD shall reduce the funds in the participating jurisdiction’s HOME Investment 

Trust Fund by the amount of any expenditures that were not in accordance with the 

requirements of this part; and 

2. HUD may do one or more of the following: 

i. Prevent withdrawals from the participating jurisdiction’s HOME Investment 

Trust Fund for activities affected by the failure to comply; 

ii. Restrict the participating jurisdiction’s activities under this part to activities 

that conform to one or more model programs which HUD has developed in 

accordance with section 213 of the Act; 

iii. Remove the participating jurisdiction from participation in allocations or 

reallocations of funds made available under subpart B or J of this part; 

iv. Require the participating jurisdiction to make matching contributions in 

amounts required by § 92.218(a) as HOME funds are drawn from the 

participating jurisdiction’s HOME Investment Trust Fund United States 

Treasury Account. Provided, however, that HUD may on due notice suspend 

payments at any time after the issuance of a notice of opportunity for hearing 

pursuant to paragraph (b)(1) of this section, pending such hearing and a final 

decision, to the extent HUD determines such action necessary to preclude the 

further expenditure of funds for activities affected by the failure to comply. 

b. Proceedings. When HUD proposes to take action pursuant to this section, the respondent 

in the proceedings will be the participating jurisdiction or, at HUD’s option, the State 

recipient. Proceedings will be conducted in accordance with 24 CFR part 26, subpart B. 

SUBPART M – AMERICAN DREAM DOWNPAYMENT 

INITIATIVE 

§ 92.600 Purpose 

This subpart describes the requirements for the HOME Program American Dream 

Downpayment Initiative (ADDI). Through the ADDI, HUD makes formula grants to 

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participating jurisdictions that qualify for allocations to assist low-income families achieve 

homeownership in accordance with the provisions of this subpart. Unless otherwise noted in 

this subpart, the HOME Program requirements contained in subparts B through L of this part 

do not apply to the ADDI. 

§ 92.602 Eligible Activities 

a. Eligible activities. ADDI funds may only be used for: 

1. Downpayment assistance towards the purchase of single family housing by lowincome families who are first-time homebuyers; and 

2. Rehabilitation that is completed in conjunction with the home purchase assisted 

with ADDI funds. The rehabilitation assisted with ADDI funds, including the 

reduction of lead paint hazards and the remediation of other home health hazards, 

must be completed within one year of the purchase of the home. Total rehabilitation 

shall not exceed 20 percent of the participating jurisdiction’s ADDI fiscal year 

formula allocation. FY2003 ADDI funds may not be used for rehabilitation. 

b. Eligible project costs. ADDI funds may be used for the following eligible costs: 

1. Acquisition costs. The costs of acquiring single family housing. 

2. Rehabilitation costs. The eligible development hard costs for rehabilitation projects 

described in § 92.206(a) and the costs for reduction of lead paint hazards and the 

remediation of other home health hazards. FY2003 ADDI funds may not be used for 

rehabilitation. 

3. Related soft costs. Reasonable and necessary costs incurred by the homebuyer or 

participating jurisdiction and associated with the financing of single family housing 

acquisition and rehabilitation. These costs include, but are not limited to: 

i. Costs to process and settle the financing for purchase of a home, such as 

private lender origination fees, credit report fees, fees for title evidence, fees 

for recordation and filing of legal documents, attorneys fees, and private 

appraisal fees. 

ii. Architectural, engineering, or related professional services required to prepare 

plans, drawings, specifications, or work write-ups. 

iii. Costs to provide information services, such as fair housing information to 

prospective homeowners. 

iv. Staff and overhead costs directly related to carrying out the project, such as 

work specifications preparation, loan processing inspections, and other 

services related to assisting a potential homebuyer (e.g., housing counseling), 

which may be charged to project costs only if the individual purchases single 

family housing with ADDI assistance. 

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v. Costs of environmental review and release of funds (in accordance with 24 

CFR part 58) that are directly related to the project. 

4. Ineligible costs. ADDI funds may not be used for the development costs (hard costs 

or soft costs) of new construction of housing or for rental assistance. 

c. Forms of investment. A participating jurisdiction may invest ADDI funds as interestbearing loans or advances, non-interest bearing loans or advances, interest subsidies 

consistent with the purposes of this subpart, deferred payment loans, grants, or other 

forms of assistance that HUD determines to be consistent with this subpart. Each 

participating jurisdiction has the right to establish the terms of assistance, subject to the 

requirements of this subpart. 

d. Minimum amount of assistance. The minimum amount of ADDI funds in combination 

with HOME funds that must be invested in a project is $1,000. 

e. Maximum amount of assistance. The amount of ADDI funds provided to any family shall 

not exceed the greater of six percent of the purchase price of the single family housing or 

$10,000. This limitation does not apply to FY2003 ADDI funds. 

f. Limitation on subrecipients and contractors. A participating jurisdiction may not provide 

ADDI funds to an entity or organization that provides downpayment assistance, if the 

activities of that entity or organization are financed in whole or in part, directly or 

indirectly, by contributions, service fees, or other payments from the sellers of housing, 

whether or not made in conjunction with the sale of specific housing acquired with 

ADDI funds. 

§ 92.604 ADDI Allocation Formula 

a. General. HUD will provide ADDI funds to participating jurisdictions in amounts 

determined by the formula described in this section. 

b. Allocation to states that are participating jurisdictions. HUD will provide ADDI funds 

to each state in an amount that is equal to the percentage of the national total of lowincome households residing in rental housing in the state, as determined on the basis of 

the most recent available U.S. census data (as adjusted by HUD). 

c. Local participating jurisdictions. Subject to paragraph (d) of this section, HUD will 

further allocate to each local participating jurisdiction located within a state an amount 

equal to the percentage of the state-wide total of low-income households residing in 

rental housing in such participating jurisdiction, as determined on the basis of the most 

recent available U.S. census data (as adjusted by HUD). 

d. Limitation on allocations to local participating jurisdictions. (1) Allocations under 

paragraph (c) of this section shall be made only if the local participating jurisdiction: 

i. Has a total population of 150,000 individuals or more, as determined on the 

basis of the most recent available U.S. census data (as adjusted by HUD); or 

ii. Would receive an allocation of $50,000 or more. 

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2. Any allocation that would have otherwise been made to a local participating 

jurisdiction that does not meet the requirements of paragraph (d)(1) of this section 

shall revert back to the state in which the participating jurisdiction is located. 

e. Consortia with members in more than one state. A consortium with members in more 

than one state will receive an allocation if the consortium meets the requirements 

described in paragraph (d) of this section. 

f. Allocation of FY2003 ADDI funds. For the allocation of FY2003 ADDI funds, HUD will 

consider a participating jurisdiction’s need for, and prior commitment to, assistance to 

homebuyers. Puerto Rico is a “state” for FY2003 ADDI funds. 

1. Need. The need of the participating jurisdiction for assistance to homebuyers is 

measured by its ADDI formula allocation, as calculated under paragraphs (b) 

through (e) of this section. 

2. Prior commitment. Only those participating jurisdictions that have demonstrated 

prior commitment to assistance to homebuyers will receive FY2003 ADDI funds. A 

participating jurisdiction has demonstrated prior commitment to homebuyers if it 

has previously committed funds to such purpose under the HOME program, the 

Community Development Block Grants (CDBG) program, mortgage revenue 

bonds, or existing funding from state and local governments. 

§ 92.606 Reallocations 

If any funds allocated to a participating jurisdiction under § 92.604 become available for 

reallocation, the funds shall be reallocated in the next fiscal year in accordance with § 92.604. 

§ 92.608 Consolidated Plan 

To receive an ADDI formula allocation, a participating jurisdiction must address the use of 

the ADDI funds in its consolidated plan submitted in accordance with 24 CFR part 91. 

§ 92.610 Program Requirements 

The following program requirements contained in part E of this part apply to the ADDI: 

a. Private-public partnership. The private-public partnership provisions contained in 

§ 92.200 apply to the ADDI. 

b. Distribution of assistance. The distribution of assistance requirements contained in 

§ 92.201 apply to the ADDI. 

c. Income determinations. The income determination requirements contained in § 92.203 

apply to the ADDI. 

d. Pre-award costs. The requirements regarding pre-award costs contained in § 92.212 

apply to the ADDI. 

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e. Matching contribution requirement. The matching contribution requirements contained 

in §§ 92.218–92.222 apply to FY2003 ADDI funds only. 

§ 92.612 Project Requirements 

The following project requirements contained in subpart F of this part apply to the ADDI: 

a. Maximum per-unit subsidy amount and subsidy layering. The maximum per-unit subsidy 

limits and subsidy layering requirements contained in § 92.250 apply to the total HOME 

and ADDI funds in a project. 

b. Property standards. Housing assisted with ADDI funds must meet the property standards 

contained in § 92.251. 

c. Qualification as affordable housing. Housing assisted with ADDI funds must meet the 

affordability requirements contained in § 92.254(a) and (c). If a project receives both 

HOME and ADDI funds, the total of HOME and ADDI funds in the project is used for 

calculating the period of affordability described in § 92.254(a)(4) and applied to resales 

(§ 92.254(a)(5)(i)) and recaptures (§ 92.254(a)(5)(ii)). 

d. Faith-based organizations. Faith-based organizations are eligible to participate in the 

ADDI as subrecipients or contractors as provided in § 92.257. 

§ 92.614 Other Federal Requirements 

a. The following federal requirements contained in subpart H of this part apply to the 

ADDI: 

1. Other federal requirements and nondiscrimination. The federal and 

nondiscrimination requirements contained in § 92.350 apply to the ADDI. 

2. Environmental review. The environmental review requirements contained in 

§ 92.352 apply to the ADDI. 

3. Labor. The labor requirements contained in § 92.354 apply to ADDI. 

4. Lead-based paint. The lead-based paint prevention and abatement requirements 

contained in § 92.355 apply to the ADDI. 

5. Conflict of interest. The conflict of interest requirements contained in § 92.356 

apply to the ADDI. 

6. Consultant activities. The requirements regarding consultant activities contained in 

§ 92.358 apply to the ADDI. 

b. The following federal requirements contained in subpart H of this part do not apply to 

the ADDI: 

1. Affirmative marketing. The affirmative marketing requirements contained in 

§ 92.351(a). 

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2. Displacement, relocation, and acquisition. The displacement, relocation, and 

acquisition requirements implementing the Uniform Relocation Assistance and Real 

Property Acquisition Policies Act (42 U.S.C. 4201-4655) and the implementing 

regulations at 49 CFR part 24, contained in § 92.353 do not apply to ADDI, except 

the requirements do apply to FY2003 ADDI funds. 

3. Executive Order 12372. The requirements of Executive Order 12372 (entitled 

“Intergovernmental Review) described in § 92.357. 

§ 92.616 Program Administration 

The following program administration requirements contained in subpart K of this part apply 

to the ADDI: 

a. HOME Investment Trust Fund. The requirements regarding the HOME Investment Trust 

Fund contained in § 92.500 apply to the ADDI, with the exception of paragraphs (c)(2) 

and (d)(1)(A). 

b. HOME Investment Partnership Agreement. The requirements regarding HOME 

Investment Partnership Agreements contained in § 92.501 apply to the ADDI. 

c. Program disbursement and information system. The requirements regarding program 

disbursement and information systems contained in § 92.502 apply to the ADDI. 

d. Program income, repayments and recaptured funds. The requirements regarding 

program income, repayments, and recaptured funds contained in § 92.503 apply to the 

ADDI, except the program income and recaptured funds must be deposited in the 

participating jurisdiction’s HOME investments trust fund local account and used in 

accordance with the HOME program requirements. 

e. Participating jurisdiction responsibilities and written agreements. The requirements 

regarding participating jurisdiction responsibilities and written agreements contained in 

§ 92.504 apply to the ADDI, with the modification that the written agreement is not 

required to cover any HOME requirement that is not applicable to the ADDI. 

f. Applicability of uniform administrative requirements. The uniform administrative 

requirements contained in § 982.505 apply to the ADDI. 

g. Audit. The audit requirements contained in § 92.506 apply to the ADDI. 

h. Closeout. The closeout requirements contained in § 92.507 apply to the ADDI. 

i. Recordkeeping. The project records must include records demonstrating that the family 

qualifies as a first-time homebuyer. The recordkeeping requirements contained in 

§ 92.508 apply to the ADDI, with the exception of the following paragraphs: 

1. Paragraph (a)(1); 

2. Paragraphs (a)(2)(iv), (a)(2)(v), (a)(2)(vi), (a)(2)(xi), and (a)(2)(xii); 

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3. Paragraphs (a)(3)(vi), (a)(3)(vii), (a)(3)(viii), (a)(3)(ix), and (a)(3)(xiii); 

4. Paragraph (a)(4); 

5. Paragraphs (a)(7)(i)(B), (a)(7)(i)(C), (a)(7)(ii)(A), and (a)(7)(ix) (in addition, the 

requirements of paragraph (a)(7)(iv) apply to FY2003 ADDI funds only); and 

6. Paragraphs (c)(1) and (c)(3) (in addition, the requirements of paragraph (c)(5) apply 

to FY2003 ADDI funds only). 

j. Performance reports. The requirements regarding performance reports contained in § 

92.509 apply to the ADDI. 

§ 92.618 Performance Reviews and Sanctions 

HUD will review the performance of participating jurisdictions in carrying out its 

responsibilities under the ADDI in accordance with the policies and procedures contained in 

subpart L of this part. 

 

[FR-4832-I-01] 

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