Arkansas Administrative Code › Agency 109 - Arkansas Development Finance Authority › Division 04 - Multi-Family Housing › Rule 109.04.07-005 - HOME Program Policy and Operations Manual

Current through Register Vol. 49, No. 6, June, 2024
I .
Introduction
The Arkansas Development Finance Authority ("ADFA" or the
				"Authority"), a public body politic and corporate, with corporate succession,
				was created May 1, 1985, in part to assist low-income and under-served
				Arkansans in the financing, development and preservation of affordable housing.
				ADFA receives and administers funds provided by the HOME Investment
				Partnerships Act (the HOME Act, Title II of the Cranston-Gonzalez National
				Affordable Housing Act). The HOME Investment Partnerships Program ("the HOME
				Program") was created to provide funds to expand the supply of affordable
				housing for very low-income and low-income persons.
ADFA embraces its responsibility to administer the HOME Program
				that has been entrusted to it. ADFA will administer the HOME Program
				creatively, effectively and efficiently under the housing conditions that exist
				in the state of Arkansas (the "state") and with all practical safeguards
				against waste or fraud. ADFA will practice and advocate innovation, flexibility
				and expansion in program design to address unmet housing needs throughout the
				state.
To that end, this Policy and Operations Manual is presented to
				provide an overview of ADFA policies and procedures as they pertain to the HOME
				Program. This manual is not meant to be a substitute for HOME Program
				regulations, but as a supplement to them. It is not exhaustive regarding all
				considerations affecting the use of HOME Program funds. While careful
				consideration and due care has been used in developing the manual, HOME Program
				participants are encouraged to consult with HOME Program staff persons to
				ensure correct interpretation of policies and regulations. ADFA reserves the
				right to implement additional policies as needed.
II.
Purpose of the HOME Program
The HOME Program regulations consist of 24 CFR Part 92, dated
				September 16, 1996. The general purposes of the HOME Program include:
* expanding the supply of decent and affordable housing for low
				and very low-income Americans;
* strengthening the abilities of state and local governments to
				design and implement strategies for achieving adequate supplies of decent, safe
				and affordable housing;
* extending and strengthening partnerships among all levels of
				government and the private sector, including for-profit and nonprofit
				organizations, in the production and operation of affordable housing.
As the administrator of the state of Arkansas' HOME Program
				funds, ADFA has designed its programs into four main categories; the HOME
				Rental Housing Program, the Homeowner Housing Programs, the Homebuyer Program,
				and Tenant-Based Rental Assistance ("TBRA").
General Requirements of the HOME Program
III.
General Requirements of the HOME
			 Program
A.
Equal Opportunity and
			 Fair Housing
The state shall not exclude any organization or individual from
				participation under any program funded in whole or in part by HOME Program
				funds on the grounds of age, disability, race, creed, color, national origin,
				familial status, religion or sex. The following federal requirements as set
				forth in 24 CFR
				5.105(a),
Nondiscrimination and Equal Opportunity
, are
				applicable to HOME Program developments:
Fair Housing Act
24 CFR 100
Executive Order 11063, as amended (Equal Opportunity in
						  Housing)
24CFR 107
Title VI of the Civil Rights Act of 1964
						  (Nondiscrimination in Federal Programs)
24 CFR 1
Age Discrimination Act of 1975
24 CFR 146
Section 504 of the Rehabilitation Act of 1973
24 CFR 8
Executive Order 11246, as amended (Equal Employment
						  Opportunity Programs)
41 CFR 60
Section 3 of the Housing and Urban Development Act of
						  1968
24 CFR 135
Executive Order 11625, as amended (Minority Business
				Enterprises)
Executive Order 12432, as amended (Minority Business
				Enterprises)
Executive Order 12138, as amended (Women's Business
				Enterprise)
In addition to the above requirements, all HOME Program
				participants must ensure that their Equal Opportunity and Fair Housing policies
				related to activities funded by the HOME Program are consistent with the
				current Consolidated Plan adopted by their jurisdiction.
B.
Allocation of Funds
HOME Program funds committed to the state of Arkansas will be
				allocated as promulgated in the State of Arkansas' Consolidated Plan. In
				addition, the state may spend up to ten percent (10%) of its HOME Program
				allocation for administrative and planning expenses. ADFA HOME Program funds
				allocated within local participating jurisdictions (PJ)
will be limited
				to American Dream Downpayment Initiative (ADDI) loans and joint Low-Income
				Housing Tax Credit/HOME developments
. To date, these areas include
				Little Rock, North Little Rock, Pine Bluff and Fort Smith.
Á Section 3 requires that the
				employment and other economic opportunities generated by federal financial
				assistance for housing and community development programs shall, to the
				greatest extent feasible, be directed toward low and very low income persons,
				particularly those who are recipients of government assistance for housing.
Á Executive Orders 11625,
				12432 and 12138 require that participating jurisdictions and local programs
				must prescribe procedures acceptable to HUD for a minority outreach program to
				ensure the inclusion, to the greatest extent possible, of minorities and women
				entities owned by minorities and women in all contracts. Local programs must
				also develop acceptable policies and procedures if their application is
				approved by ADFA.
HOME Program allocations for the Rental Housing Program and the
				Homeowner Program, and allocations to nonprofit entities, for-profit entities
				and CHDO activities, will be in the form of repayable or forgivable loans.
				Allocations for the Tenant-Based Rental Assistance Program (TBRA) will be in
				the form of grants.
Applicants must request at least one hundred thousand dollars
				($100,000) in HOME Program funds to be considered for a HOME Program
				allocation, with the exception of TBRA projects. The maximum loan amount that
				can be requested for affordable housing developments is four hundred thousand
				dollars ($400,000) with the exception of single-family new construction
				projects, which has a maximum amount of four hundred twenty-five thousand
				($425,000). The maximum amount that can be requested for project delivery costs
				is ten percent (10%) of the final allocation amount.
Applicants who choose to use a consultant must include the
				consultant fee, if any, in an amount not to exceed ten percent (10%) of the
				requested HOME Program allocation in the proposed development budget.
				Applicants who choose not to use a consultant may apply for an amount not to
				exceed ten percent (10%) of the requested HOME Program allocation as
				reimbursement of project delivery costs. Any amounts requested for project
				delivery costs may be in addition to the requested HOME Program allocation
				amount. The HOME Program allocation may not include both a consultant fee and a
				project delivery cost reimbursement.
C.
Layering
Layering is the combining of other federal resources on a
				HOME-assisted development that results in an excessive amount of subsidy for
				the development. Such activity is prohibited. ADFA will analyze each
				application to ensure that only the minimum amount of assistance is allocated
				to the development. In no case may the amount of HOME Program funds allocated
				exceed the maximum allocation limit as defined in Section IV. B (Maximum Amount
				of HOME Funding Per Applicant) and maximum per-unit allocation as defined in
				Section V. H (Maximum Per-unit HOME Assistance) of this manual.
D.
Affirmative
			 Marketing
Any entity applying for HOME Program funds must adopt
				affirmative marketing procedures and requirements for all HOME-assisted housing
				and submit the affirmative marketing plan with the HOME Program application.
				The affirmative marketing plan and requirements for HOME-assisted housing must
				be approved by ADFA prior to any HOME Program funds being committed to a
				development. Affirmative marketing requirements and procedures must
				include:
1. methods for informing the
			 public, owners and potential tenants about fair housing laws and the policies
			 of the local program;
2. a
			 description of what owners and/or the program administrator will do to
			 affirmatively market housing assisted with HOME Program funds;
3. a description of what owners and/or the
			 program administrator will do to inform persons not likely to apply for housing
			 without special outreach;
4.
			 maintenance of records to document actions taken to affirmatively market
			 HOME-assisted units and to assess marketing effectiveness; and
5. a description of how efforts will be
			 assessed and what corrective actions will be taken when requirements are not
			 met.
E.
Environmental Review
In implementing the HOME Program, the environmental effects of
				each activity must be assessed in accordance with the provisions of the
				National Environment Policy Act of 1969 and the related authorities listed in
				HUD's regulations at 24 CFR Parts 50 and 58.
ADFA, as the HOME Participating Jurisdiction, and the units of
				local government funded by ADFA will be responsible for carrying out
				environmental reviews. ADFA will approve the release of funds for local
				governments and must request the release of funds from HUD for any developments
				of CHDOs or nonprofit organizations. HOME Program funds are approved as a
				conditional commitment until the environmental review process has been
				completed, with the option to proceed, modify or cancel the project based upon
				the results of the review. ADFA reserves the right to require a Phase I
				Environmental Study for rental projects as part of the environmental review
				process.
F.
Lead-Based Paint Requirements
The Lead-Based Paint Regulations described in 24 CFR Part 35
				require that lead hazard evaluation and reduction activities be carried out for
				all developments constructed before 1978 and receiving HOME Program assistance.
				Applications for rehabilitation funds for existing buildings constructed prior
				to 1978 must include a lead hazard evaluation, by appropriate lead-certified
				personnel. The application must also include detailed lead hazard reduction
				plan, in accordance with the regulations, and separately identify within the
				rehabilitation budget, the costs associated with reduction of lead hazards in
				accordance with the regulation and guidelines. All HOME Program fund
				allocations will be contingent upon the applicant agreeing to complete lead
				hazard reduction, evidenced by a clearance report performed by appropriate
				lead-certified personnel. The Authority will allow up to two thousand five
				hundred dollars ($2,500) per unit for lead-based paint testing, assessment, and
				clearance report. In a development where HOME Program funds will be used on
				only a portion of the units, the lead-based paint requirements apply to
ALL
units and common areas in the development.
G.
Contractor
			 Requirements
All general contractors working on all HOME-funded developments
				must have an active license issued by the Arkansas Contractor's Licensing Board
				(the "State Licensing Board") as applicable and meet all requirements of
				contractors in the state of Arkansas, including securing Builder's Risk
				insurance. Contractors may not "share" a license. That is, ADFA will not allow
				one contractor to work from another contractor's license.
All ADFA HOME-funded projects must have a general contractor
				that is properly licensed by the Arkansas State Contractor's Licensing Board.
				Any questions regarding licensing issues and a list of licensed contractors may
				be directed to the State Licensing Board at the following address:
Arkansas Contractor's Licensing Board
4100 Richards Road
North Little Rock, AR 72117
(501) 372-4661
Any contractor or subcontractor who has been debarred by any
				entity or had a contractor license suspended by any entity within the previous
				twelve (12) months will be prohibited from participating in the HOME Program.
				All general contractors working on all HOME-funded developments must obtain one
				of the following:
(1) a payment and
			 performance bond; or
(2) an
			 Irrevocable Letter of Credit.
Note: Construction contracts for homeowner
			 rehabilitation projects $25,000 or under will not be required to obtain a bond
			 or an irrevocable letter of credit..
H.
Labor Standards
Davis-Bacon wage compliance and other federal laws and
				regulations pertaining to labor standards apply to all contracts for
				rehabilitation or construction of twelve (12) or more HOME-assisted units in a
				development. Davis-Bacon and related laws include:
* Davis-Bacon and Related Acts ( 40 USC 276a-276a-7 )
* Contract Work Hours and Safety Standards Act ( 40 USC 327-333
				)
* Copeland (Anti-Kickback) Act (
				18 USC
				874;
				40 USC 276c)
* Fair Labor Standards Act of 1938, as amended (
				29 USC
				201, et seq.)
The construction contract for any HOME-assisted activity must
				contain the applicable wage provisions and labor standards. Davis-Bacon does
				not apply to projects using solely volunteer labor or to sweat equity projects.
				ADFA will monitor all developments subject to Davis-Bacon requirements to
				ensure compliance with all applicable regulations.
I.
Inspections
Inspections are required with all activities that are funded
				through the HOME Program. ADFA currently has inspectors that will be available
				as needed. There are currently four (4) required inspections that are
				identified below:
Stage 1
Excavation
Metals
Termite treatment
Rough-in plumbing
Earth work
Water proofing (vapor barrier)
Footing
Slab
Stage 2
Plumbing top-out
Electrical rough-in
Framing
Roof
Interior wall systems
Exterior wall systems
Ventilation
Insulation
Stage 3
Flooring systems
Painting
Doors
Cabinets
HVAC
Electrical top-out
Special construction (elevators, etc.)
Appliances
Stage 4
Final Inspection
Rental housing development inspections may be scheduled more
				frequently, as warranted.
* Pre-construction Meetings - ADFA inspector must attend any
				pre-construction meetings for multi-family developments;
* Rehabilitation Projects - when a project is ready for a draw
				on funds, the property must be inspected to verify that the work has been
				completed.
ADFA will only make payments on work that has been
				completed and inspected by an ADFA inspector.
You may fax or mail your payment request, with all of the
				required documentation, to ADFA using the following contact information:
Arkansas Development Finance Authority
Attn: HOME Program Department
P.O. Box 8023
Little Rock, AR 72203-8023
FAX (501) 682-5859
ADFA staff will coordinate with recipients of HOME Program
				funds and inspectors to schedule all inspections.
J.
Change Orders
ADFA recognizes that changes in a development occur from time
				to time. It is important that HOME Program participants submit change orders on
				the proper ADFA form. All change orders
must be
approved by the ADFA Staff prior to initiating work. No
				payment of HOME funds will be made on change orders that have not been approved
				by ADFA. Any changes to the original amounts of HOME Program assistance must be
				reflected by an Amended and Restated Mortgage and Promissory Note. Each
				Single-Family HOME Program Agreement will include provisions for possible
				funding of change orders on a limited basis.
K.
Debarment and Suspension
ADFA will require participants in lower-tier transactions
				covered by 24 CFR 24 to certify that neither it nor its principals are
				presently debarred, suspended, proposed for debarment, declared ineligible or
				voluntarily excluded from any entity from a federally funded transaction. Any
				participant that remains on a debarred or suspended condition shall be
				prohibited from participation in the ADFA HOME Program as long as they are
				classified in this manner.
Note:
ADFA reserves the right to require criminal
				background checks for all program participants as part of the applicaton
				process. Please refer to ADFA's agency policy and requirements for information
				regarding this item.
L.
Flood
			 Plains
HOME Program funds may generally not be invested in housing
				located in an area identified by the Federal Emergency Management Agency as
				having special flood hazards. ADFA discourages developments located in special
				flood hazard areas but, in some instances and with written permission from
				ADFA, houses located in a flood plain may be assisted. It is the responsibility
				of the applicant to evaluate any remedies to remove any properties from the
				flood plain and ensure the feasibility of the proposed plan. ADFA is willing to
				consider the proposed remedy and must approve the proposal in writing prior to
				approval of any HOME Program allocation. The community must be currently
				participating in the National Flood Insurance Program, and flood insurance must
				be obtained and maintained for the full period of affordability.
M.
Procurement
All solicitation of bids for goods and services to be paid with
				HOME Program funds must be conducted openly and competitively in accordance
				with Arkansas State Procurement guidelines, when applicable.
N.
Submitting a HOME Program
			 Application
ADFA will evaluate each application to determine if the
				proposal meets threshold criteria. Threshold criteria includes submission of a
				complete application; proposal of an eligible activity; proposal of a
				development that, in the opinion of ADFA, is physically, financially and
				administratively feasible; provision of written verification in support of the
				proposed activity from the chief elected official of the area where the
				activity will be undertaken; and proposal of a development that meets the
				requirements of 24
CFR Part 92, as amended. See the HOME Program application for a
				complete list of threshold items at the ADFA website:
www.state.ar.us/adfa
Applications will be taken on a continuous basis until
				available funds have been allocated. ADFA will review HOME Program applications
				in accordance with the Application checklist and on the following
				criteria:
*
Affordable Housing Experience
:
				Capacity must be demonstrated by including an application that identifies all
				necessary components to accomplish the development, e.g., effective control of
				sites for acquisition and construction developments, the financial capacity to
				repay the HOME loan and other financial arrangements, as well as comprehensive
				program design. ADFA's HOME Program staff will conduct reviews of:
a. Previous performance under the HOME
			 Program, the LIHTC Program, the Below-Market Interest Rate Program and the
			 Financing Adjustment Factor Program (not applicable to new applicants),
			 including disbursements, monitoring and findings;
b. Relevant experience in administering
			 housing programs;
c. Relevant
			 experience in developing and managing housing programs and;
d. Size of staff relative to all other
			 program responsibilities.
*
Housing Need Factor
: The need factor
				pertains to percentages of the state's lower income households, the percentage
				of households with housing costs greater than thirty percent (30%) of area
				median family income adjusted for family size, and the current census
				population count of areas proposed for housing development. Consideration will
				be given to communities experiencing substantial population changes.
*
Financing
: ADFA places a strong
				emphasis on projects that will include the use of funds from other sources.
				Funds leveraged on a HOME-funded activity may not be used as leverage on
				subsequent projects. There must be written documentation to substantiate
				leveraged funds in an application, and the funds must be from a verifiable
				source. Because an application qualifies for HOME Program funds does not mean
				that they will automatically receive LIHTCs. All costs will be examined for
				reasonableness, and applicants may be denied if costs are deemed
				unreasonable.
*
Readiness
: The purpose of the
				application process is to allocate funds to eligible applicants for proposed
				projects. Applicants applying for HOME Program funds must begin their
				developments within ninety (90) days of the notice to proceed. Developments
				that do not begin within ninety (90) days are subject to have all HOME Program
				funds recaptured and reallocated to other eligible activities unless otherwise
				approved by ADFA. ADFA realizes that there may be extenuating circumstances
				that may delay the beginning of a project. Such circumstances will be reviewed
				on a case-by-case basis.
*
Matching:
Applicants must list at
				least one (1) of the eligible forms of match they will provide as part of their
				project. A list of eligible forms of match include: cash or cash equivalents
				from a non-federal source; value of waived taxes; fees or charges assoicated
				with HOME projects; value of donated land or real property; cost of
				infrastructure improvements associated with HOME projects; value of donated
				materials, equipment, labor and professional services; direct costs of
				supportive services to residents of HOME projects; and direct costs of
				homebuyer counseling to families purchasing homes with HOME assistance.
O.
Performance
			 Standards
Successful applicants must disburse twenty-five percent (25%)
				of the total HOME Program funds within ninety (90) days of the notice to
				proceed. Seventy-five percent (75%) of total HOME Program funds allocated must
				be disbursed on the development within one year from the date of the notice to
				proceed. If these performance standards are not met, any unspent HOME Program
				funds may be recaptured and reallocated to fund other affordable housing
				developments. Applicants approved for funding that do not complete the required
				number of units will be considered in default of their HOME Agreement and
				jeopardize future funding through the HOME Program. In addition, projects must
				adhere to the performance measurements and indicators as outlined in the State
				Consolidated Plan.
For applicants also applying for Low Income Housing Tax Credits
				(LIHTC), the ninety (90) day performance standard will begin upon the LIHTC
				reservation . For developments applying for both HOME Program funds and LIHTC,
				any allocation of HOME Program funds is contingent upon the successful
				reservation of LIHTC.
Multiple HOME applications may be submitted by HOME
				participants for funding. A participant may not have more than
three (3)
HOME projects underway at any given time period. If a participant has
three (3)
projects currently underway, additional applications
				may not be submitted until 100% of HOME funds on any one of the previously
				approved application(s) has been expended. A project is considered complete
				once ADFA has received all completion documentation. It is within ADFA's
				discretion to evaluate a participant's capacity in regards to undertaking
				multiple projects. A HOME program participant is defined as either an owner
				(i.e., rental projects), developer, consultant or public
				official/employee.
P.
Amendments to Applications
Any changes to any material aspect of the development must be
				presented as an amendment to the initial application for HOME Program funds.
				The request for amendment will go through the normal review and approval
				process as outlined in Section R, "HOME Program Application Process Path", of
				this manual.
Q.
Construction Contingency
ADFA allows up to ten percent (10%) of the HOME allocation for
				constuction contingencies. A rehabilitation, reconstruction, or new
				construction activity, including contingencies, may not exceed the ADFA
				established per unit limits for the HOME Funds (i.e., $25,000/unit for
				homeowner rehabilitation, $85,000/ unit for single-family reconstruction or new
				construction; and $40,000/unit for rental projects.
R.
HOME Program Application Process
			 Path
Click here
				to view image
S.
HOME Program Allocation/Disbursement
Following ADFA Board approval of the HOME Program application,
				the following processes will apply:
1.
			 Disbursement of HOME Program funds will occur only when all of the following
			 conditions have been met:
a. Required
			 environmental review process must be satisfactorily completed.
b. Project closing documents shall reflect a
			 project completion date acceptable to ADFA and the recipient of the HOME
			 Program funds. The HOME Program Agreement will outline the payment of the HOME
			 Program funds, (e.g., how the funds will be disbursed, by escrow or pro-rata
			 share, etc.) The HOME Program Agreement must contain provisions for the timing
			 of HOME Program fund disbursements.
c. ADFA Staff must complete all IDIS set up
			 procedures.
d. ADFA must issue a
			 Notice to Proceed. To ensure that all HOME Program requirements have been met,
			 no work shall begin until all documentation has been executed and ADFA issues a
			 Notice to Proceed.
NO APPLICATIONS WILL BE ACCEPTED ON A PROJECT WHERE
			 CONSTRUCTION HAS ALREADY BEGUN.
e. A pre-construction conference is held. For
			 rental activities the pre-construction conference must be conducted with the
			 development team and an ADFA representative. For homeowner activities the
			 pre-construction conference must be conducted with the applicant/consultant,
			 the homeowner, the contractor, and an ADFA Inspector.
2. Cost incurred prior to HOME Program fund
			 allocation shall not be reimbursed (except in the case of an eligible soft cost
			 or an interim construction loan approved by ADFA).
3. Retainage will be released thirty (30)
			 days after the final inspection is approved and upon ADFA's receipt of all
			 completion documentation.
For rental activities, the following completion documentation
				will be required prior to ADFA's release of retainage:
a. Placed in Service form.
b. Certification of release of
			 liens.
c. Completion form - (HUD
			 form 40097).
d. Hazard
			 insurance.
e. Date of
			 occupancy.
f. Certification of
			 final inspection.
For homeowner activities, the following completion
				documentation will be required prior to ADFA's release of retainage:
a. Project completion report
b.  HUD form 40096.
c. Certification in release of
			 liens.
d. Certification of final
			 inspection.
e. Plumbing
			 certification.
f. Electrical
			 certification.
If any HOME Program funded project has an available balance
				after development completion and release of retainage, ADFA will deobligate
				those funds and reallocate such balance of HOME Program funds to other eligible
				activities according to ADFA's adopted HOME Program allocation process.
T.
USDA
			 Rural Development and Low Income Housing Tax Credit Funding
One of the purposes of the HOME Program is to encourage
				governments to use HOME Program funds efficiently and to encourage partnerships
				between public and private entities. In keeping with this mission, ADFA
				requires that recipients leverage their HOME Program allocation to the greatest
				extent possible with funds from other sources. Two such sources include Rural
				Development and Low Income Housing Tax Credits.
To obtain information about the programs offered by Rural
				Development, please contact USDA Rural Development, Attention: Multi-Family
				Department, 700 West Capitol, Little Rock, AR 72201.
To obtain more information about ADFA's Low Income Housing Tax
				Credit Program, please contact ADFA, Attention: Multi-Family Department, 423
				Main Street, Suite 500, Little Rock, AR 72201.
U.
Gap Financing
A variety of financing is often available to and used by
				developers of affordable housing. In fact, affordable housing developments are
				almost always funded by multiple sources. This is particularly true for HOME
				Program funded developments in light of the fact that the HOME Program is a
				"gap financing" source that assists in making the housing units affordable to
				low-income persons. HOME funds are not intended to be used to finance an entire
				development.
While the maximum HOME Program funding is four hundred thousand
				dollars ($400,000), ADFA will calculate the "gap financing" amount and fund
				only that amount. For mortgage subsidy projects, the maximum subsidy is the
				lesser of $25,000 or 20% of the purchase price.
Note:
Applicants
				must provide a copy of the final appraisal prior to disbursement of
				funds.
SOURCES AND USES
SOURCES
USES
Loan(s)
Acquisition
$200,000
1st Mortgage
$1,000,000
Construction
$1,100,000
Cash
$100,000
Site Improvements
$100,000
Other
Soft Costs
$50,000
Total S ources
$1,100,000
Total U ses
$1,450,000
Gap Between Sources and Uses:$350,000
Maximum HOME Program Funding:$300,000
V.
Recapture of Funds
It is imperative that funds allocated to participants be used
				as quickly as possible and in the most efficient manner. ADFA will recapture
				allocated funds that have not been used in accordance with applicable
				performance standards. Applicable performance standards include performance
				standards adopted by ADFA (see section O. - PERFORMANCE STANDARDS) and HOME
				Program regulatory commitment and disbursement requirements. These funds will
				then be placed back into the pool of funds that are available to fund other
				developments.
W.
Monitoring
During the period of affordability, ADFA must perform on-site
				compliance and monitoring inspections of all rehabilitation of single-family
				and multi-family developments utilizing HOME Program funds to determine
				compliance with the Final Rule and current ADFA HOME Program Policy and
				Procedures Manual.
Note: Please refer to ADFA's Compliance and Monitoring
				Manual for more guidance on monitoring requirements.
X.
Closing of Transactions
ADFA will select and/or approve a closing entity to provide
				closing services for
all
HOME Program
				transactions using ADFA-approved documents. The services will be available and
				required in the county where the development is located. HOME Program staff
				will provide closing instructions for all HOME Program funded transactions to
				the closing entity. ADFA will be responsible for payment of costs associated
				with closing the HOME Program portion of the transaction on both homeowner and
				rental activities.
Y.
Audit
ADFA requires that recipients have an audit conducted of
				federal funds received in accordance with Generally Accepted Accounting
				Principals (GAAP) and the Single Audit Act Amendments of 1996 ( 31 U.S.C.
				7501-7507 ) and revised OMB Circular A-133, "Audits of States, Local
				Governments, and Non-Profit Organizations" as required in 24 CFR Part 84 and 85
				respectively.
Z.
Conclusion
ADFA seeks to partner with individuals and organizations that
				will carry out the express goals of increasing and improving decent, safe and
				affordable housing for all Arkansans.