HOME Final Rule – does it apply to your property?

Written by Lois Churchill, Spectrum Enterprises

You own or manage a property with HOME funding. The new Final Rule came out in August of 2013. Do the requirements in that rule apply to your property? At first glance most folks thought it only applied to new projects to which HOME funds were committed on or after 8/23/13 – we now know this to not be entirely true.

In January 2015 HUD provided an Applicability of Requirements chart to help determine what rules apply to what properties. There are three categories:

Category #1 are requirements to clarify or codify existing requirements. Those requirements are applicable to all HOME projects regardless of when funds were committed. Included in category #1 are types of housing that are excluded from the definition of housing and student qualifications.

Category #1 requirements specific to rental housing include items such as requirements of at least a one year lease (or less, if mutually agreed upon), fact that HOME rents include both rent and actual utilities or rent and the utility allowance; that PJs may designate more than the required minimum HOME units as Low-HOME units; that supportive services cannot be mandatory for tenants of HOME-assisted units (except supportive services provided in transitional housing), and tenant selection procedures.

Category #2 are new project requirements, applicable to all new projects to which HOME funds were committed on or after the effective date of the applicable requirement (typically 8/23/13). Items such as completion deadlines, property standards, conflict of interest regarding who may not live in a HOME unit, and initial PJ inspections for new properties are included in Category #2 requirements. Also shown in Category #2 but not yet effective is changeover to UPCS standards for physical inspections.

Category #2 requirements specific to rental housing include ability of a PJ to charge monitoring fees, requirement for capital needs assessments for rental projects with 26+ total units (not yet in effect), requirements for initial occupancy of vacant units, requirement that HOME agreements stipulate whether HOME units are fixed or floating, on-site inspection requirements. There are several requirements in this section of the New Rule that were to be effective 1/24/15 but have been further delayed.

Category #3 are new program requirements that are applicable to all HOME projects as of their effective dates (typically 8/23/13) regardless of when funds were committed.


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