HOME Rental Development Program

What the Program Does:

The HOME Rental Development (HOME Rental) program, funded through the federal HOME Investment Partnerships program, assists communities and developers with increasing the supply of affordable rental housing. At least 15% of the State's annual HOME Investment Partnership Program funding is set-aside for Community Housing Development Organizations (CHDO). Nonprofit organizations must meet certain criteria to be considered a CHDO, as defined by HOME program regulations.

CHDOs may apply for an amount up to $500,000 as a soft second loan. The loans may be used to acquire and rehabilitate, rehabilitate or construct rental housing.

Who the Program Helps:

The program helps communities, via housing developers, respond to housing issues and needs that the private sector has failed to address. CHDOs and other housing developers obtain funding to supplement a primary loan for the development and, in the process, strengthen the capacity of the organization. Communities achieve added housing stock with an enhanced tax base to further their economic and community development efforts. The HOME Rental Development Program is effective in addressing some of the most difficult rental housing development need that communities have.

How It Works:

The loan allows the owner/developer to lessen the amount of debt required to finance a development, thus allowing rents to be lowered. A certain percentage of units, equal to or greater than the percentage of HOME funds to the total development cost, are considered HOME units. These units are required to be rented to households who meet the income guidelines of the program and the rents on these units must be restricted.

In developments that contain four or fewer HOME units, 100 percent of the HOME units must be restricted to households at or below 60 percent of the area median income and utilize the High HOME rents (see Rent Limits below).

In developments with five or more HOME units, 20 percent of the units must be rented to households at or below 50 percent of the area median income. These units must also have rents restricted to the Low HOME rents. Of the remaining 80 percent, 70 percent (of the total) can be rented to those at or below 60 percent of the area median income and 10 percent (of the total can be rented to those at or below 80 percent of the area median income. The rents of these units are restricted to the High HOME rents.

Type(s) of Assistance:

-Loans
-Services

Funding Cycle:

Applications for funding are due the first Friday each February

Eligible Entities:

Non-profit owners and developer. To be eligible for CHDO set-aside and CHDO operating funds, an organizations must be a non-profit organization and meet the criteria specified at 24 C.F.R Part 92.

Key Statistics for Fiscal Year 2008: July 1, 2007 – June 30, 2008

Funds were allocated for the construction of 106 affordable rental units. Six CHDOs, serving 8 different communities were allocated HOME funds. The program will generate an estimated capital investment of $13,797,460 in these communities.