HomeMy WebLinkAboutR-2024-228 Resolution authorizing a contract with Catholic Charities Housing Services of HOME-ARP funds to support the construction of an affordable housing project known as Casa de la Mora RESOLUTION NO. R-2024-228
A RESOLUTION authorizing a Contract between the City of Yakima and Catholic Charities
Housing Services for federal housing and urban development HOME
American Rescue Plan funds for construction of a 72-unit affordable
housing project known as Casa de la Mora.
WHEREAS, the City received money from the federal government's HOME American
Rescue Plan (HOME-ARP) program under CFDA Contract# 14.239 in the amount of$1,822,807
in HOME-ARP funds, which must be used to provide housing, shelter, and supportive services
for qualifying populations; and
WHEREAS, Catholic Charities Housing Services is a qualified nonprofit housing
developer eligible to receive HOME-ARP funds from the City of Yakima to expend on qualified
affordable housing projects under such program; and
WHEREAS, Catholic Charities Housing Services and the City of Yakima, by and through
the Office of Neighborhood Development Services, shall enter into an Agreement whereby the
City will provide $1,600,000.00 to Catholic Charities Housing Services to help construct the Casa
de la Mora housing development at 115 N 10th St., Yakima, which is a proposed 73-unit apartment
complex serving households with incomes ranging from 0-60% of the Yakima County Area
Median Income; and
WHEREAS, as part of the grant, Catholic Charities will enter into a contract, promissory
note, deed of trust and covenant to ensure that the units remain affordable for an affordability
period of fifteen (15) years; and
WHEREAS, federal funds are involved in this transaction, requiring an environmental
evaluation through the NEPA process; and
WHEREAS, the NEPA process, including HUD review of the NEPA and the Project, is not
complete so the City Manager is not authorized to execute the documents until that process has
been completed and the Project can move forward; and
WHEREAS, due to the timing of the projected closing of the various loans necessary to
construct the Project, of which the City's HOME-ARP funding is one portion, it is necessary to
give the City Manager authorization to sign the documents, contingent on the NEPA process
being completed in full; and
WHEREAS, the City Council of the City of Yakima finds that it is in the best interests of its
residents to enter into a Contract with Catholic Charities Housing Services to construct 72 units
of affordable housing with federal monies provided by HUD through the HOME-ARP program and
authorize the City Manager to execute the agreement and associated documents once
confirmation is received by the City that the NEPA process is complete and the Project can move
forward; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
1
The City Manager is hereby authorized to execute the following documents only upon
completion of the NEPA process, including HUD review and approval of the NEPA documents
and Project:
1. A Contract between the City of Yakima and Catholic Charities Housing Services—
Diocese of Yakima in the amount of One Million Six-Hundred Thousand Dollars
($1,600,000) in federal housing and urban development HOME-ARP funds to fund
construction of 72 units of affordable housing for persons within the City of Yakima.
2. An Affordability Covenant requiring that the Project is subject to compliance
requirements and standards, including remaining affordable under HUD requirements,
for a term of 15 years after Project completion.
3. A Promissory Note in the amount of $1,600,000.00 payable if there is a Contract
violation or if the Project does not meet federal Project Requirements as outlined in
the Contract;
4. A Deed of Trust securing the Promissory Note.
ADOPTED BY THE CITY COUNCIL this 17th day of December, 2024.
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Patricia Byers/, Mayor
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CONTRACT BETWEEN THE CITY OF YAKIMA
OFFICE OF NEIGHBORHOOD DEVELOPMENT SERVICES
AND DEVELOPER – CATHOLIC CHARITIES HOUSING SERVICES – DIOCESE OF YAKIMA
CONTRACT NUMBER: ____________________
1. CFDA: 14.239 HOME-American Rescue Plan
2. DEVELOPER/AWARDEE: Catholic Charities Housing Services – Diocese of Yakima
3. HUD Entity Type: DEVELOPER
4. Address: 5301 Tieton Dr. STE G, Yakima, WA 98908
5. Phone: (509) 853-2800
6. Contact Person: Bryan Ketcham, VP & Director of Housing Services
7. Title of Service or Program being funded: Casa de la Mora
8. Awarding Federal Agency: U.S. Department of Housing and Urban Development
9. Unique Entity Identifier Number:
10. Federal Award Year and Federal Award Number: 2024
11. Amount of Contract Award: $1,600,000.00
12. The term of this Contract shall commence upon the execution date of DEVELOPER’S receipt of
“Letter to Proceed” from City of Yakima Office of Neighborhood Development Services and the
project will begin construction within three (3) months of entering this Contract and will be
completed by November 30, 2028 at midnight, unless sooner terminated by either party in
accordance with the terms of this Contract and the Exhibits attached hereto and incorporated
herein by this reference. This Contract will be in effect throughout the affordability period
established in the Exhibits hereto.
13. This contract award and the rights and obligations of both parties hereto shall be subject to and
governed by the following:
(a) “Terms and Conditions” attached hereto as Exhibit “A” and incorporated herein
by this reference;
(b) The HOME-ARP Program standards and requirements, including, without
limitation the requirements in Notice CPD-21-10: Requirements for the Use of Funds in the
HOME-ARP Program (“Notice CPD-21-10”). A copy of Notice CPD-21-10 is attached
hereto as Exhibit “B” and is fully incorporated into the terms of this Contract. Developer
agrees to abide by and be bound to all standards and requirements in Notice CPD-21-10
and any failure to comply with said standards and requirements shall be deemed a default
under this Contract;
(c) Operating budget including the funding sources and uses statement and the work
plan, attached hereto as Exhibit “C” and incorporated herein by this reference; and
(d) City of Yakima Resolution No. R-2024- , a copy of which is
attached hereto as Exhibit “E” and incorporated herein by this reference.
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14.Final Contract payment shall be subject to satisfactory completion of the project described in
Exhibit “C”, and satisfaction of all contract terms and conditions, including, but not limited to,
the submission of the final report and billing invoice information within thirty (30) days of the
contract closing date, and as stated in the Exhibits hereto.
This written document, together with all of the incorporated Exhibits hereto, constitutes the entire
Contract and terms of Contract between the parties hereto.
IN WITNESS THEREOF the parties have executed this Contract as of the day and year stated
below.
CITY OF YAKIMA DEVELOPER/AWARDEE:
Victoria Baker, City Manager Bryan Ketcham, VP & Dir. of Housing Services
City of Yakima Catholic Charities Housing Services-
Diocese of Yakima
Date:_____________________________ Date:
Bill Preston, Community Development Director
Date:
ATTEST
Rosalinda Ibarra, City Clerk
City Contract No:
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EXHIBIT “A”
TERMS AND CONDITIONS
The City of Yakima, as a recipient of a housing and community development grant (the “Grant”) from the
U.S. Department of Housing and Urban Development (HUD), hereby designates
AWARDEE/DEVELOPER (also referred to herein as the “Contractor”) to undertake, and the
AWARDEE/DEVELOPER hereby agrees to undertake, that certain community development or housing
assistance project described in Exhibit “C”, Scope of Work (hereinafter sometimes referred to as “the
Project”).
Section I – Definitions
A.AGENCY – is hereby defined as the Office of Neighborhood Development Services, the HOME
Program administering agency of the City of Yakima. For the purpose of this Contract and all
administration of HOME funds, the AGENCY shall act on behalf of the CITY in the execution and fiscal
and programmatic control of this Contract. The term “Approval by the CITY” or like term used in this
Contract shall in no way relieve the DEVELOPER from any duties or responsibilities under the terms of
this Contract, or obligation State or local law or regulation.
B.FEE – is hereby defined as the amount of money the CITY agrees to pay and the DEVELOPER agrees
to accept as payment in full for all the professional, technical and construction services rendered pursuant
to this Contract to complete the WORK as further defined in SCOPE OF WORK, herein.
C.WORK – is hereby defined as all the professional, technical and construction services to be rendered
or provided by the DEVELOPER as described herein and in the SCOPE OF WORK.
D.PROJECT – is defined in Section II below and Exhibit C attached hereto and fully incorporated
herein.
E.HOME – is hereby defined as the HOME American Rescue Plan as described in 24 CFR Part 92,
under the authority of 42 U.S.C. 3535 (d) and 12701 - 12839.
F.DEVELOPER – is hereby defined as the AWARDEE/DEVELOPER listed on page 1 of this
Contract, Catholic Charities Housing Services – Diocese of Yakima.
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Section II – Project
DEVELOPER’s Project will develop 72 new units of affordable and permanent housing units with 1
manager’s unit which will provide housing to qualifying persons in the City of Yakima. Twenty-five (25)
units will be designated as HOME-ARP-assisted units (the “Assisted Units”) and leased to members of
qualifying populations (as defined in Notice CPD-21-10) for the duration of the 15-year affordability
period as further described in the Affordability Covenant entered into on or about the date hereof by and
between the Borrower (as defined herein) and the City. It is anticipated that the Assisted Units will serve
the homeless qualifying population as further described in Notice CPD-21-10. Other members of
qualifying populations (as defined in Notice CPD-21-10), including individuals fleeing domestic
violence, dating violence, sexual assault, stalking, or human trafficking, certain veterans and those at risk
of homelessness or housing instability, all as further described in Notice CPD-21-10, may be served by
the Assisted Units. More Project information is found in Exhibit C attached hereto. HOME funds shall
be used for the construction of the Assisted Units on the property located at approximately 115 N. 10th St.,
Yakima, WA 98901 with assessor tax parcel no. 191318-44027
Section III – Term
A.GENERAL
The DEVELOPER expressly agrees to complete all work required by this Contract in accordance with the
timetable set forth.
Milestone Deadlines
Project Start Date: Date of signature
Anticipated Construction Start Date: December 1, 2024
Project Completion Date: November 30, 2028
Duration of Agreement: Through the end of the Affordability Period
Outlined (see Section B herein)
The Amount of the Grant that the City hereby loans to Casa de la Mora LLLP, a Washington limited
liability limited partnership (the “Borrower”), an affiliate of the DEVELOPER, is One Million Six-
Hundred Thousand Dollars ($1,600,000.00) for the Project. The loan is evidenced by that certain
Promissory Note, Deed of Trust, and Affordability Covenant, entered into on or about the date hereof by
and between the Borrower (as defined herein) and the City.
B.AFFORDABILITY
The project is subject to an affordability compliance period of fifteen (15) years from the date the project
is completed. The project is considered complete or completed thirty days after the following have been
completed, as determined by the City:
1.A Certificate of Occupancy has been submitted to the City;
2.A final inspection has been done by the City’s Office of Neighborhood Development
Services or its designee;
3.All required tenant information for the 25 HOME Assisted Units is submitted to the
City;
4.The project meets the definition of project completion under 24 CFR 92.2;
5.Final reimbursement is submitted and approved; and
6.Final draw and all accomplishment data has been entered into the HUD IDIS system
and the activity is completed.
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The project should be considered complete no later than November 30, 2028. The DEVELOPER will
assure continued compliance with all HOME program requirements. The HOME program requirements
and standards include, without limitation, the requirements in Notice CPD-21-10 attached hereto as
Exhibit B. For rental projects this includes ongoing property standards inspections and occupancy
requirements; rent limits established by HUD; and income determinations annually reviewed by the City.
For homebuyer units this includes monitoring units for principal residency and recapture of funds at time
of resale. HOME requirements specify that a deed restriction will also be in place throughout the
affordability period.
The DEVELOPER is undertaking a multifamily residential rental project which will be operated as low-
income housing. This affordable housing unit project will support homelessness assistance and
supportive services in compliance with all HOME-ARP standards and requirements.
The procedures for rent increases shall follow the Washington State Landlord-Tenant Act requirements
outlined in RCW 59.18 et.seq, and as amended in the future. State law currently requires a minimum of
Sixty (60) days’ notice to change any term of a rental contract, including the amount due and owing for
rent and any increase in the amount of rent may not become effective prior to the completion of the term
of the rental agreement; or, in the case of a subsidized tenancy where the amount of rent is based on the
income of the tenant or circumstances specific to the subsidized household, a landlord shall provide a
minimum of thirty (30) days’ prior written notice of an increase in the amount of rent which will become
effective upon completion of the term of the rental agreement or sooner upon mutual consent RCW
59.18.140.
C.TIME IS OF THE ESSENCE
Timely completion of the work specified in this Contract is an integral and essential part of performance.
The expenditure of HOME funds is subject to Federal deadlines and could result in the loss of the Federal
funds. By the acceptance and execution of this Contract, it is understood and agreed by the DEVELOPER
that the PROJECT will be completed as expeditiously as possible and that the DEVELOPER will make
every effort to ensure that the project will proceed and will not be delayed. Failure to meet these deadlines
can result in cancellation of this contract and the revocation of HOME funds. Since it is mutually agreed
that time is of the essence as regards this Contract, the DEVELOPER shall cause appropriate provisions
to be inserted in all contracts or subcontracts relative to the work tasks required by this Contract, in order
to ensure that the PROJECT will be completed according to the timetable set forth. It is intended that such
provisions inserted in any subcontracts be, to the fullest extent permitted by law and equity, binding for
the benefit of the CITY and enforceable by the CITY against the DEVELOPER and its successors and
assigns to the project or any part thereof or any interest therein.
In the event the DEVELOPER is unable to meet the above schedule or complete the above services
because of delays resulting from Acts of God, untimely review and approval by the CITY and other
governmental authorities having jurisdiction over the PROJECT, or other delays that are not caused by the
DEVELOPER, the CITY shall grant a reasonable extension of time for completion of the WORK. It shall
be the responsibility of the DEVELOPER to notify the CITY promptly in writing whenever a material
delay is anticipated or experienced, and to inform the CITY of all facts and details related to the delay.
D.COMMENCEMENT OF WORK
The City of Yakima, through ONDS, shall furnish the DEVELOPER with written notice to proceed upon
release of funds from HUD related to the Project pursuant to 24 CFR Part 58. No work on the Project
shall occur prior to the notice to proceed without written approval from the City of Yakima.
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Section IV – Scope of Work
The DEVELOPER, in close coordination with the CITY, shall perform all professional services and
activities (the “WORK”) necessary to complete the development and occupancy of the following project
in full compliance with the terms of this Contract, including, but not limited to, Exhibit “C”. (Use of
HOME funds, property location, budget, completion schedule & compliance term):
From the contract execution date to continue until the termination date as
specified within this Contract, Developer will cause Borrower to construct 72
new units of affordable and permanent supportive housing along with 1
manager’s unit. 25 units will be designated as HOME-ARP Assisted Units and
will serve the homeless qualifying population. Other groups, including
individuals fleeing domestic violence, dating violence, sexual assault, stalking,
or human trafficking, certain veterans and those at risk of homelessness or
housing instability, may be served by the Assisted Units.
It is understood that the DEVELOPER will provide a specific working budget and realistic timetable as
relates to: acquisition, construction/rehabilitation, soft costs, development fees and other allowable
costs/activities prior to any fund usage. Said budget shall identify all sources and uses of funds, and
allocate HOME and non-HOME funds to activities or line items. No payment will be made by the City
prior to receiving the working budget. The aforementioned Work tasks will be performed in essentially
the manner proposed in the DEVELOPER’s proposal as received by the AGENCY on February 1, 2024.
The aforementioned document will be considered to be a part and portion of this Contract fully
incorporated herein Exhibit “C”. Further, a Budget Summary is attached hereto as Exhibit “D” and
considered to be a part and portion of this Contract fully incorporated herein.
Section V – Reimbursement of Expenses & Developer Fees
A. GENERAL.
Project expenses (excluding developer fee) shall be paid based on vouchers for actual expenses
incurred or paid and based on the budget summary attached hereto. Requests for payment must be
submitted by the DEVELOPER or Borrower on forms specified by the CITY, with adequate and
proper documentation of eligible costs incurred in compliance with 24 CFR 92.206 and necessary
for HUD IDIS disbursement requirements. All such expenses shall be in conformance to the
approved project budget. Budget revision and approval shall be required prior to payment of any
expenses not conforming to the approved project budget.
The City reserves the right to hold payment until adequate documentation has been provided by
the Contractor and reviewed by the City. The Contractor agrees to the following provisions in
satisfying the terms and conditions of this contract.
B.PAYMENT AND DISBURSEMENTS:
Disbursements by the City of Yakima from this contract/loan award shall be on a reimbursement
basis covering actual expenditures by the DEVELOPER or Borrower or obligations of the
DEVELOPER or Borrower currently due and owing, but not paid. Disbursements shall be
limited to allowable costs and so shall be made upon the occurrence of all the following, in
addition to any other conditions contained herein or in the special conditions:
1.Receipt by the City of Yakima ONDS of a written reimbursement request on
forms provided by the City of Yakima ONDS supported by copies of vouchers,
invoices, salary and wage summaries, or other acceptable documentation; and
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2.Determination by the City of Yakima ONDS that the expenditures or obligations
for which reimbursement is sought constitute allowable costs under the HOME
Program and also fall within the applicable Project Budget.
The DEVELOPER shall submit written claims for reimbursement of services performed under
this Contract. The DEVELOPER may not request disbursement of funds under this Contract
until the funds are needed for payment of eligible costs. The amount of each request must be
limited to the amount needed.
C.No payment shall be made for any service rendered by the DEVELOPER except for services
within the scope of a category set forth in the budget in Exhibit “C” of this Contract, and all funds
received must be used for service as identified in Exhibit “C” of this Contract.
D.The DEVELOPER shall submit to the City of Yakima ONDS a written request for approval of
budget revision when a proposed revision would result in an increase or decrease of ten percent
(10%) or more per unit from what has been set forth in the approved budget subject category.
The City’s written budget revision approval must be received by the DEVELOPER prior to the
DEVELOPER incurring any expenditures against the revised budget subject categories.
When the revision of the DEVELOPER budget does not exceed ten percent (10%) of an approved
budget subject category, the DEVELOPER must submit a revised budget to the City of Yakima
ONDS prior to the submittal of claims against the budget.
E.CITY reserves the right to inspect records and project sites to determine that reimbursement and
compensation requests are reasonable. The CITY also reserves the right to hold payment until
adequate documentation has been provided and reviewed.
F.Within thirty (30) days of the contract closing date, DEVELOPER shall submit a final invoice
that includes all unpaid invoices and a final report. Final payment shall be made only after the
CITY has determined that all services have been rendered, files and documentation delivered
(including the final invoices and final report), and the Assisted Units have been placed in service
in full compliance with HOME regulations, including submission of a completion report and
documentation of eligible occupancy, property standards and long-term use restrictions. If the
final invoices and report are not received within thirty (30) days of the contract closing date,
DEVELOPER understands and agrees that it will not receive any payment for any final pending
unpaid invoices. The City will retain ten percent (10%) until City has determined that all services
have been rendered.
G.CITY shall have the right to review and audit all records of the DEVELOPER pertaining to any
payment by the CITY. Said records shall be maintained for a period of the HOME required
affordability period.
H.This loan shall not be utilized to substantially reduce the amount of local financial support for
community development activities below the level of such support prior to the availability of such
assistance.
I.The DEVELOPER shall return to the City all monies provided by the City if any of the following
occur: the DEVELOPER materially changes the primary purpose and scope of the Project as
described in Exhibit C; or DEVELOPER is unable to continue and/or provide services as
described in Exhibit C.
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Section VI – Project Requirements and Compliance with Laws
The DEVELOPER agrees to comply with all requirements of the HOME Program as stated in 24 CFR
Part 92, including but not limited to the following. In addition, DEVELOPER agrees to comply with all
requirements and standards as stated in NOTICE CPD-21-10 attached hereto as Exhibit B.
A. Environmental Review
The City of Yakima, through the AGENCY retains environmental review responsibility for purposes of
fulfilling requirements of the National Environmental Policy Act, under which the City of Yakima may
require the DEVELOPER to furnish data, information and assistance for the City’s review and assessment
in determining whether the City must prepare an Environmental Impact Statement.
The Environmental Review was submitted to the U.S. Department of Housing and Urban
Development (HUD) on _December 3_, 2024 for review. The Environmental Review was
approved by HUD on ___________, 2024. All mitigation required in the Environmental Review
shall be completed by DEVELOPER as part of the Project.
The DEVELOPER retains responsibility for fulfilling the requirements of the State Environmental Policy
Act (SEPA) and regulations and ordinances adopted thereunder.
In addition to the requirements of Section XIII below, in the event DEVELOPER fails to furnish any data,
information, forms, or documents requested by the City to fulfill its obligations under the National
Environmental Policy Act or any other federal or state environmental policy, law, or regulation, Failure to
furnish data, information, forms or documents shall result in a withholding of funds for payment and, if
funds have been disbursed, a requirement to repay all funds associated with this Agreement to the City
and may result in termination of this Agreement. The DEVELOPER expressly agrees to do all things
necessary and take all necessary steps to facilitate the environmental review of the Project.
B. Any HOME funds advanced to the PROJECT will be secured by a note and mortgage or deed of trust,
and in the case of a rental project, a deed covenant as required by 24 CFR Part 92.
C. The DEVELOPER will ensure that any expenditure of HOME funds will be in compliance with the
requirements at 92.206, and acknowledges that HOME funds will only be provided as reimbursement for
eligible costs incurred, including actual expenditures or invoices for work completed.
D. If the project is to be owner-occupied, the DEVELOPER will ensure that all 25 HOME Assisted Units
will be in compliance with 24 CFR 92.254, including documenting that the property is eligible under
92.254(a)(1) – (2), and will maintain compliance during the minimum compliance period. (If the property
also contains a rental unit assisted with HOME funds, the DEVELOPER will ensure that occupancy
complies with the requirements of 92.254(a)(6).) If the project is to be a rental, the DEVELOPER will
ensure that that project is eligible under 92.214, and that it will meet the applicable standards of 24 CFR
92.252 253 at occupancy and for the minimum compliance period.
E. The 25 designated HOME-Assisted Units of this PROJECT will meet the affordability requirements as
found in 24 CFR 92.252 (rental) or 92.254 (owner-occupied) as applicable. The DEVELOPER shall
collect and maintain Project beneficiary information pertaining to household size, income levels, racial
characteristics, the presence of Female Headed Households, and any other beneficiary information
required by HUD in order to determine low and moderate-income benefit in a cumulative and individual
manner. Income documentation shall be in a form consistent with HOME requirements as stated in the
HUD Technical Guide for Determining Income and Allowances Under the HOME Program.
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F. In the selection of occupants for PROJECT units, the DEVELOPER shall comply with all
nondiscrimination requirements of 24 CFR 92.350. If the project consists of 5 or more units, the
DEVELOPER will implement affirmative marketing procedures as required by 24 CFR 92.351. Such
procedures are subject to approval of the AGENCY.
G. If the PROJECT is occupied at the time of this commitment, the DEVELOPER will comply with the
relocation requirements of 24 CFR 92.353.
H.DEVELOPER shall assure compliance with 24 CFR 92.251 as relates to Property Standards and
Housing Quality Standards (HQS), Accessibility Standards under 24 CFR 92.251(a)(3) as applicable, and
Lead Based Paint Requirements as found in 24 CFR 92.355 and 24 CFR Part 35.
I. If the PROJECT is to be owner-occupied, the DEVELOPER shall assure that any NOTES and
MORTGAGES recorded for homebuyers shall be in compliance with 24 CFR 92.254 and that the
DEVELOPER will monitor each unit for principal residency (under 92.254(a)(3)) and resale/recapture
(under 92.254 (a)(4) – (5)).
J.DEVELOPER will provide any documentation required by the AGENCY regarding match as may be
required to document match for purposes of the HOME program.
K. If any project under this Contract involves the construction or rehabilitation of 12 or more HOME-
Assisted Units, the DEVELOPER shall comply with the provisions of the Davis-Bacon Act (40 U.S.C.
276 a to a - 7) as supplemented by AGENCY of Labor regulations (29 CFR, Part 5), as amended.
L. If the property is sold through a lease-purchase Contract, the DEVELOPER will ensure compliance
with 92.254(a)(7), as modified by the 1999 Appropriations Act, Section 599B.
M.DEVELOPER will be monitored by the AGENCY for compliance with the regulations of 24 CFR 92
for the compliance period specified above. The DEVELOPER will provide reports and access to project
files as requested by the AGENCY during the PROJECT and for the length of the HOME required
affordability period.
N. HOME-ARP funds must be used in accordance with HUD Notice CPD 21-10 (Notice) and 24 CFR
92.214 and Subrecipients may not charge servicing, origination, or other fees for the purpose of covering
costs of administering the HOME-ARP program except as provided under the Notice and 24 CFR 92.214.
O. DEVELOPER will comply with the regulations at 24 CFR 92.202 which require the HOME program
to be administered in a manner that provides housing that: (A) 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, the Fair Housing Act, Executive Order 11063, and HUD regulations issued pursuant thereto;
and (B) promotes greater choice of housing opportunities. New construction projects must meet site and
neighborhood standards described in 24 CFR 882.708(c) which places limiting conditions on building in
areas of “minority concentration” and “racially mixed” areas.
Section VII – Repayment
A. All HOME funds are subject to repayment in the event the PROJECT does not meet the Project
Requirements as outlined above, or if DEVELOPER violates any provisions of this Contract and/or
Exhibits hereto with regards to HOME and/or HUD requirements.
B. It is understood that upon the completion of the PROJECT, any HOME funds reserved but not
expended under this Contract will revert to the CITY.
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C.If the PROJECT is for owner-occupancy, the DEVELOPER shall lend the HOME funds to the
individual buyers in an amount sufficient to make the purchase affordable. Any HOME funds that reduce
the price of the property below the fair market value of the property shall be secured by a HOME note and
mortgage as required in 92.254(a)(5)(ii), using the note and mortgage prescribed or approved by the
AGENCY (and consistent with the method of recapture identified in the CITY’s “Consolidated Plan”).
For Contracts involving CHDOs, all net sales proceeds from the sale of units are considered to be CHDO
proceeds that may be retained by the DEVELOPER and used in conformance with 24 CFR 92.300(a)(2),
to be retained by the CHDO and used to further affordable housing for qualified first time home buyers
within the City of Yakima.
Section VIII – Procurement Standards
The DEVELOPER shall establish procurement procedures to ensure that materials and services are
obtained in a cost-effective manner. When procuring for services to be provided under this Contract, the
DEVELOPER shall comply at a minimum with the nonprofit procurement standards at 24 CFR 84.40 -
.48.
In addition, the following requirements are imposed on any procurement under this PROJECT:
Any personal property having a useful life of more than one year and purchased wholly or in part with
loan funds at a cost of three hundred dollars ($300) or more per item, shall upon its purchase or receipt
become the property of the City of Yakima and/or federal government. Final ownership and disposition
of such property shall be determined under the provisions of 2 CFR Part 200. The DEVELOPER shall be
responsible for all such property, including its care and maintenance, and shall comply with the following
procedural requirements:
1.Property records shall be maintained accurately and provide for: A description of the
property; manufacturer’s serial number or other identification number; acquisition date
and cost; source of the property; percentage of HOME funds used in the purchase of
property; location, use, and condition of the property.
2.A physical inventory of property shall be taken and the results reconciled with the
property records at least once every two years to verify the existence, current utilization,
and continued need for the property.
3.A control system shall be in effect to insure adequate safeguards to prevent loss, damage,
or theft to the property. Any loss, damage, or theft of the property shall be investigated
and fully documented.
4.Adequate maintenance procedures shall be implemented to keep the property in good
condition.
5.If the DEVELOPER elects to capitalize and depreciate such nonexpendable personal
property in lieu of claiming the acquisition cost as a direct item of cost, title to such
property shall remain with the DEVELOPER. An election to capitalize and depreciate or
claim acquisition cost as a direct item of cost shall be irrevocable.
6. Nonexpendable personal property purchased by the DEVELOPER under the terms of this
Contract, in which title is vested in the City of Yakima or Federal Government shall not
be rented, loaned, or otherwise passed to any person, partnership, corporation, association
or organization without the prior express approval of the City of Yakima ONDS.
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7.Any nonexpendable personal property furnished to, or purchased by, the DEVELOPER,
title to which is vested in the City of Yakima or federal government shall, unless
otherwise provided herein or approved by the City of Yakima ONDS be used only for the
performance of activities defined in this Contract.
8.As a condition prerequisite to reimbursement for the purchase of nonexpendable personal
property, title to which shall vest in the City of Yakima or federal government, the
DEVELOPER agrees to execute such security Contracts and other documents as shall be
necessary for the City of Yakima or federal government to perfect its interest in such
property in accordance with the “Uniform Commercial Code-Secured Transactions” as
codified in Article 9A of RCW Chapter 62A.
9.The DEVELOPER shall be responsible for any loss or damage to the property of the City
of Yakima or federal government (including expenses entered thereunto) which results
from negligence, willful misconduct, or lack of good faith on the part of the
DEVELOPER to maintain and administer in accordance with sound management
practices that property, to ensure that the property will be returned to the City of Yakima
or federal government in like condition to that in which condition the property was
acquired by purchase, fair wear and tear excepted.
Section IX – Conflict of Interest Provisions
The DEVELOPER warrants and covenants that it presently has no interest and shall not acquire any
interest, directly or indirectly, which could conflict in any manner or degree with the performance of its
services hereunder. The DEVELOPER further warrants and covenants that in the performance of this
contract, no person having such interest shall be employed. HOME conflict of interest provisions, as
stated in 92.356, apply to the award of any contracts under the Contract and the selection of tenant
households to occupy HOME-Assisted Units. No employee, agent, consultant, elected official, or
appointed official of the DEVELOPER may obtain a financial interest or unit benefits from a HOME-
assisted activity, either for themselves or those with whom they have family or business ties, during their
tenure or for one year thereafter. This prohibition includes the following:
•Any interest in any contract, subcontract or agreement with respect to a HOME-assisted project
or program administered by the DEVELOPER, or the proceeds thereunder; or
•Any unit benefits or financial assistance associated with HOME projects or programs
administered by the DEVELOPER, including:
Occupancy of a rental housing unit in a HOME-assisted rental project;
Receipt of HOME tenant-based rental assistance;
Purchase or occupancy of a homebuyer unit in a HOME-assisted project;
Receipt of HOME homebuyer acquisition assistance; or
Receipt of HOME owner-occupied rehabilitation assistance.
This prohibition does not apply to an employee or agent of the DEVELOPER who occupies a HOME
assisted unit as the on-site project manager or maintenance worker. In addition, no member of Congress
of the United States, official or employee of HUD, or official or employee of the Participating Jurisdiction
shall be permitted to receive or share any financial or unit benefits arising from the HOME-assisted
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project or program. Prior to the implementation of the HOME-assisted activity, exceptions to these
provisions may be requested by the DEVELOPER in writing to the Participating Jurisdiction.
The DEVELOPER must demonstrate and certify that the policies and procedures adopted for the activity
will ensure fair treatment of all parties, and that the covered persons referenced in this policy will have no
inside information or undue influence regarding the award of contracts or benefits of the HOME
assistance. The Jurisdiction may grant exceptions or forward the requests to HUD as permitted by 24 CFR
92.356, 85.36 and 84.42, as they apply.
Section X – City Responsibilities
CITY shall furnish the DEVELOPER with the following services and information from existing CITY
records and CITY files:
A.CITY shall provide to the DEVELOPER information regarding its requirements for the PROJECT.
B.CITY will provide the DEVELOPER with any changes in HOME regulations or program limits that
will affect the project, including but not limited to income limits, property value limits and rent limits.
C.CITY will conduct progress inspections of work completed to protect its interests as lender and
regulatory authority for the project, and will provide information to the DEVELOPER regarding any
progress inspections or monitoring to assist it in ensuring compliance. CITY’s review and approval of the
WORK will relate only to overall compliance with the general requirements of this Contract and HOME
regulations, and all CITY regulations and ordinances. Nothing contained herein shall relieve the
DEVELOPER of any responsibility as provided under this Contract.
Section XI – Equal Employment Opportunity
The City of Yakima is an Equal Opportunity Employer. During the performance of this contract, the
DEVELOPER agrees as follows:
A.DEVELOPER will not discriminate against any employee or applicant for employment because of
race, color, religion, sex, or national origin(s). The DEVELOPER will take affirmative action to ensure
the applicants are employed, and that employees are treated during employment, without regard to their
race, color, religion, sex or national origin(s). Such action shall include, but not be limited to, the
following: employment, upgrading, demotion, or transfer, recruitment or recruitment advertising; layoff
or termination; rates of pay or other forms of compensation; and selection for training, including
apprenticeship. The DEVELOPER agrees to post in conspicuous places, available to employees and
applicants for employment, notices to be provided by the contracting officer of the CITY setting forth the
provisions of this nondiscrimination clause.
B.DEVELOPER will, in all solicitations or advertisements for employees placed by or on behalf of the
DEVELOPER, state that all qualified applicants will receive consideration for employment without
regard to race, color, religion, sex, or national origin.
C.DEVELOPER will send to each labor union or representative of workers with which he has a collective
bargaining agreement or other contract or understanding, a notice to be provided by the CITY’s
contracting officer, advising the labor union or worker’s representative of the DEVELOPER’s
commitments under Section 202 of Executive Order No. 11246 of September 24, 1965, and shall post
copies of the notice in conspicuous places available to employees and applicants for employment.
D.DEVELOPER will comply with all provisions of Executive Order 11246 of September 24, 1965, and
of the rules, regulations, and relevant orders of the Secretary of Labor.
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E.DEVELOPER will furnish all information and reports required by Executive Order 11246 of
September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant
thereto, and will permit access to its books, records, and accounts by the AGENCY and the Secretary of
Labor for purposes of investigation to ascertain compliance with such rules, regulations, and order.
F.In the event the DEVELOPER is found to be in noncompliance with the nondiscrimination clauses of
this contract or with any of such rules, regulations or orders, this contract may be canceled, terminated or
suspended in whole or in part and the DEVELOPER may be declared ineligible for further Government
contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and
such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of
September 24, 1965 or by rule, regulations, or order of the Secretary of Labor or as otherwise provided by
law.
G.DEVELOPER will include the provisions of paragraphs (a) through (g) of this Contract in every
subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor
issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions
will be binding upon each subcontractor or vendor. The DEVELOPER will take such action with respect
to any subcontract or purchase order as the AGENCY may direct as a means of enforcing such provisions,
including sanctions for noncompliance; provided, however, that in the event the DEVELOPER becomes
involved in, or is threatened with litigation with a subcontractor or vendor as a result of such direction by
the AGENCY, the DEVELOPER may request the United States to enter into such litigation to protect the
interest of the United States.
Section XII – Labor, Training & Business Opportunity
DEVELOPER agrees to comply with the federal regulations governing training, employment and business
opportunities as follows:
A. It is agreed that the WORK to be performed under this Contract is on a project assisted under a
program providing direct Federal financial assistance from the US Department of Housing and Urban
Development and is subject to the requirements of Section 3 of the Housing and Urban Development Act
of 1968, as amended, 12 U.S.C. 1701 u, as well as any and all applicable amendments thereto. Section 3
requires that, to the greatest extent feasible, opportunities for training and employment be given low and
moderate income residents of the project area, and that contracts for work in connection with the project
be awarded to business concerns which are located in, or owned in substantial part by persons residing in
the project area.
B.DEVELOPER shall comply with the provisions of said Section 3 and the regulations issued pursuant
thereto by the Secretary of Housing and Urban Development set forth in 24 Code of Federal Regulations
and all applicable rules and orders of the AGENCY of Housing and Urban Development issued
thereunder as well as any and all applicable amendments thereto prior to the execution of this contract as
well as during the term of this contract. The DEVELOPER certifies and agrees that it is under no
contractual or other disability, which would prevent it from complying with these requirements as well as
any and all applicable amendments thereto.
C.DEVELOPER will include this Section 3 clause in every subcontract for work in connection with the
project and will, at the direction of the CITY, take appropriate action pursuant to the subcontractor upon a
finding that the subcontractor is in violation of regulations issued by the Secretary of Housing and Urban
Development, in 24 Code of Federal Regulations. The DEVELOPER will not subcontract with any
subcontractor where it has notice or knowledge that the latter has been found in violation of regulations
under 24 code of Federal Regulations and will not let any subcontract unless the subcontractor has first
provided it with a preliminary statement of ability to comply with these requirements as well as with any
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and all applicable amendments thereto.
D. Compliance with the provisions of Section 3, the regulations set forth in 24 Code of Federal
Regulations and all applicable rules and orders of the AGENCY of Housing and Urban Development
issued thereunder prior to the execution of the contract shall be a condition precedent to federal financial
assistance being provided to the PROJECT as well as a continuing condition, binding upon the applicant
or recipient for such assistance, its successors, and assigns. Failure to fulfill these requirements shall
subject the DEVELOPER or recipient, its contractors and subcontractors, its successors, and assigns to
those sanctions specified by 24 Code of Federal Regulations as well as with any and all applicable
amendments thereto.
Section XIII – Compliance with Federal, State & Local Laws
A. GENERAL. The DEVELOPER covenants and warrants that it will comply with all applicable
laws, ordinances, codes, rules and regulations of the state, local, and federal governments, and all
amendments thereto, including, but not limited to; Title 8 of the Civil Rights Act of 1968 PL.90-
284; Executive Order 11063 on Equal Opportunity and Housing Section 3 of the Housing and
Urban Development Act of 1968; Housing and Community Development Act of 1974, as well as
all requirements set forth in 24 CFR 92 of the HOME INVESTMENT PARTNERSHIP
PROGRAM. The DEVELOPER covenants and warrants that it will indemnify, defend, and hold
the City, its elected and appointed officials, officers, employees, agents, representatives, insurers,
attorneys, and volunteers forever free and harmless with respect to any and all damages,
liabilities, losses and expenses related to all claims, suits, arbitration actions, investigations, and
regulatory or other governmental proceedings, whether directly or indirectly arising out of the
provisions and maintenance of this Agreement or the acts, failures to act, errors or omissions of
the DEVELOPER, or any of DEVELOPER’s agents or subcontractors, in performance of this
Agreement, except for claims caused by the City’s sole negligence or willful misconduct. The
City’s right to indemnification includes attorney’s fees and costs associated with establishing the
right to indemnification hereunder in favor of the City. DEVELOPER agrees to comply with all
applicable standards, orders, or requirements issued under section 306 of the Clean Air Act (42
U.S.C. 1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order 11738,
and Environmental Protection Agency regulations (40 CFR part 15). DEVELOPER further
warrants and agrees to include or cause to be included the criteria and requirements of this section
in every non-exempt subcontract in excess of $100,000. DEVELOPER also agrees to take such
action as the federal, state or local government may direct to enforce aforesaid provisions.
B.PROCUREMENT AND CONSTRUCTION OR REPAIR PROJECT REQUIREMENTS.
The following federal provisions may apply, among others, to this Contract:
1.CERTIFICATION REGARDING DEBARMENT, SUSPENSION OR INELIGIBILITY,
AND VOLUNTARY EXCLUSION—PRIMARY AND LOWER TIER COVERED
TRANSACTIONS.
(a)DEVELOPER, defined as the primary participant and its principals, certifies by
signing these General Terms and Conditions that to the best of its knowledge
and belief that they:
(i)Are not presently debarred, suspended, proposed for debarment, declared
ineligible or voluntarily excluded from covered transactions by any
Federal department or agency.
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(ii)Have not within a three-year period preceding this Contract, been
convicted of or had a civil judgment rendered against them for
commission of fraud or a criminal offense in connection with obtaining,
attempting to obtain, or performing a public or private Contract or
transaction, violation of Federal or State antitrust statutes or commission
of embezzlement, theft, forgery, bribery, falsification or destruction of
records, making false statements, tax evasion, receiving stolen property,
making false claims, or obstruction of justice.
(iii) Are not presently indicted for or otherwise criminally or civilly charged
by a governmental entity (Federal, State, or local) with commission of
any of the offenses enumerated in paragraph (1)(b) of this section.
(iv)Have not within a three-year period preceding the signing of this
Contract had one or more public transactions (Federal, State, or local)
terminated for cause of default.
(v)Where the DEVELOPER is unable to certify to any of the statements in
this Contract, the DEVELOPER shall attach an explanation to this
Contract.
(vi)The DEVELOPER agrees by signing this Contract that it shall not
knowingly enter into any lower tier covered transaction with a person
who is debarred, suspended, declared ineligible, or voluntarily excluded
from participation in this covered transaction.
(vii)The DEVELOPER further agrees by signing this Contract that it will
include the clause titled “Certification Regarding Debarment,
Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered
Transaction,” as follows, without modification, in all lower tier covered
transactions and in all solicitations for lower tier covered transactions:
(b)LOWER TIER COVERED TRANSACTIONS
(i)Each lower tier contractor certifies, by signing this Contract that neither
it nor its principals are presently debarred, suspended, proposed for debarment,
declared ineligible, or voluntarily excluded from participation in this transaction
by any Federal department or agency.
(ii)Where the lower tier contractor is unable to certify to any of the
statements in this Contract, such contractor shall attach an explanation to this
Contract.
2.Office of Federal Contract Compliance Programs regulations, 41 CFR Part 60, Executive
Order 11246 as amended by Executive Order 12086, and 24 CFR 570.601 (Discrimination
prohibited).
3.The Lead Based Paint Poisoning Prevention Act, 42 USC Section 4831 et seq., and HUD
regulations implementing the Act, 24 CFR Part 35, where, residential structures are involved.
The Contractor shall provide whatever assistance is necessary to enable the City of Yakima’s
Building Official to carry out its inspection and certification responsibility under those
regulations.
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4.Historic and Archaeological Preservation requirements as set forth in 24 CFR Section
570.604.36 CFR Part 800, RCW 27.44.010 (Native American Burial Law), RCW 27.53.010-.090
(Protection of Archaeological Resources), and RCW 43.51.750-.820 (Preservation of Historic
Properties).
5.Architectural Barriers Act of 1968 as amended, 42 USC Section 4151 et seq.,
implementing regulations, and Chapter 70.92 RCW.
6.Accessibility Standard as set forth in 24 CFR 92.251(a)(3).
7.Clean Air Act as amended, 42 USC Section 1857 et seq; Water Pollution Control Act, as
amended, 33 USC Section 1251 et seq.; and Environmental Protection Agency regulations, 40
CFR Part 15.
8.Section 3 of the Housing and Urban Development Act of 1968 (12 USC Section 1701u)
and 24 CFR Part 135 (Employment opportunities for project area businesses and low income
persons).
9.Contract Work Hours and Safety Standards Act, 40 USC Sections 327-333, (Overtime
Compensation).
10.Davis-Bacon Act, as amended, 40 USC Sections 276a – 276a – 5, and RCW Chapter 3 –
12 (Prevailing Wage Rates).
11.2 CFR Part 200 (Procurement Standards) and Federal Management Circular, FMC 74-4.
12.The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970,
as amended, and regulations contained in 24 CFR Parts 42 and 570.
13.Title VI of the Civil Rights Act of 1964 (P.L. 88-352) as amended, and HUD regulations
with respect thereto including the regulations under 24 CFR Part 1. In the sale, lease or other
transfer of land acquired, cleared or improved with assistance provided under this Contract,
Contractor shall cause or require a covenant running with the land to be inserted in the deed or
lease for such transfer, prohibiting discrimination upon the basis of race, color, religion, sex, or
national origin, in the sale, lease or rental, or in the use or occupancy of such land or any
improvements erected or to be erected thereon, and providing that the Contractor, the County, the
City, and the United States are beneficiaries of and entitled to enforce such covenant. The
Contractor, in undertaking its obligation in carrying out the program assisted hereunder, agrees to
take such measures as are necessary to enforce such covenant and will not itself so discriminate.
14.Age Discrimination Act of 1975 (24 CFR 146).
15.Fair Housing Act (24 CFR 100, CFR 107 and 24 CFR 1).
16.Washington State/Local Building Codes/Housing Quality Standards (24 CFR 882.109).
17.WBE/MBE (24 CFR 85.36 (e)).
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18.The Build America, Buy America Act, included in the Infrastructure Investment and Jobs
Act signed into law on November 15, 2021, Pub. L. No. 117-58, sections 70901-52. The Act
requires the following Buy America preference for projects with more tan $250,000 of federal
funds: All iron and steel used in the Project are produced in the United States. This means all
manufacturing processes, from the initial melting stage through the application of coatings,
occurred in the United States.
C.DEVELOPER agrees to comply with all applicable Federal, State, City and Municipal standards for
licensing, certification and operation of facilities and programs, and accreditation and licensing of
individuals, and any other standards or criteria as described in the Contract to assure quality of services.
D.DEVELOPER shall be solely responsible for and shall pay all taxes, deductions, and assessments,
including but not limited to, sales tax, federal income tax, FICA, social security tax, assessments for
unemployment and industrial injury insurance, and other deductions from income which may be required
by law or assessed against either party as a result of this Contract. In the event the City is assessed a tax
or assessment as a result of this Contract, DEVELOPER shall pay the same before it becomes due.
Section XIV – Suspension & Termination
In accordance with 24 CFR 85.43, suspension or termination may occur if the DEVELOPER materially
fails to comply with any term of the award, and that the award may be terminated for convenience in
accordance with 24 CFR 85.44.
If, through any cause, the DEVELOPER shall fail to fulfill in timely and proper manner its obligations
under this contract, or if the DEVELOPER shall violate any of the covenants, agreements, or stipulations
of this contract, the CITY shall thereupon have the right to terminate this contract by giving written notice
to the DEVELOPER of such termination and specifying the effective date thereof, at least five (5) days
before the effective date of such termination. In such event, the DEVELOPER may be entitled to receive
just and equitable compensation for any work satisfactorily completed hereunder to the date of said
termination if all necessary documentation is provided to the CITY. Notwithstanding the above, the
DEVELOPER shall not be relieved of liability to the CITY for damages sustained by the CITY by virtue
of any breach of the contract by the DEVELOPER and the CITY may withhold any payments to the
DEVELOPER for the purpose of setoff until such time as the exact amount of damages due the CITY
from the DEVELOPER is determined whether by court of competent jurisdiction or otherwise.
Section XV – Termination for Convenience
The CITY may terminate for its convenience this contract at any time by giving at least thirty (30) days’
notice in writing to the DEVELOPER. If the contract is terminated by the CITY, as provided herein, the
City will reimburse for any actual and approved expenses incurred, including those costs involved in
terminating the contracts and shutting down the work as of the date of notice, and the DEVELOPER will
be paid as a FEE an amount which bears the same ratio to the total compensation as the services actually
performed bear to the total service of the DEVELOPER covered by this contract, less payments of
compensation previously made.
This Contract may also be terminated in whole or in part by mutual agreement of the parties.
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Section XVI – Termination for Cause Including Loss of Funds
A.TERMINATION FOR CAUSE
If the DEVELOPER fails in any manner to fully perform and carry out any of the terms, covenants, and
conditions of the Contract and its Exhibits, and more particularly if the DEVELOPER refuses or fails to
proceed with the work with such diligence as will insure its completion within the time fixed by the
schedule set forth in Exhibit C of this Contract, the DEVELOPER shall be in default and notice in writing
shall be given to the DEVELOPER of such default by the AGENCY or an agent of the AGENCY.
If the DEVELOPER fails to cure such default within such time as may be required by such notice (which
notice shall provide for a cure period in accordance with Section 8.1 and 8.2 of the Promissory Note
(191318-44027), as applicable), the CITY, acting by and through the AGENCY, may at its option
terminate and cancel the contract. In the event of such termination, all funds awarded to the
DEVELOPER pursuant to this Contract shall be immediately revoked and any approvals related to the
PROJECT shall immediately be deemed revoked and canceled. In such event, the DEVELOPER will no
longer be entitled to receive any compensation for work undertaken after the date of the termination of
this Contract, as the funds will no longer be available for this project. Such termination shall not affect or
terminate any of the rights of the CITY as against the DEVELOPER then existing, or which may
thereafter accrue because of such default, and the foregoing provision shall be in addition to all other
rights and remedies available to the CITY under the law and the note and mortgage (if in effect),
including but not limited to compelling the DEVELOPER to complete the project in accordance with the
terms of this Contract, in a court of equity. The waiver of a breach of any term, covenant or condition
hereof shall not operate as a waiver of any subsequent breach of the same or any other term, covenant, or
condition hereof.
This Contract may further be terminated by the City upon written demand by the City or AGENCY for
assurances that the terms of the Project description are not being timely complied with, if such assurances
are not made to the City’s satisfaction within thirty (30) days of the date of such written demand.
B.TERMINATION FOR LOSS OF FUNDING
In the event that funding from the Federal government is withdrawn, reduced or limited in any way after
the effective date of this Contract, and prior to its normal completion, the City of Yakima or AGENCY
may summarily terminate this Contract as to the funds reduced or limited, notwithstanding any other
termination provision of this Contract. If the level of funding so reduced or limited is so great that the
City of Yakima or AGENCY deems that the continuation of the program or project covered by this
Contract is no longer in the best interest of the public, the City or AGENCY may summarily terminate
this Contract in whole notwithstanding any other termination provisions of this Contract. Termination
under this Section shall be effective upon receipt of written notice by the DEVELOPER or its
representative.
The City and AGENCY agree to promptly notify the DEVELOPER of any proposed reduction in funding
by Federal or other officials. DEVELOPER agrees that upon receipt of such notice it shall take the
appropriate and reasonable action to reduce its spending in the affected funding area so that expenditures
do not exceed the funding level which would result if said proposed reduction became effective.
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Section XVII – Close Out
In the event this Contract is terminated in whole or in part for any reason, the following provisions shall
apply:
A. Upon written request by the DEVELOPER, the City shall make or arrange for payment to the
DEVELOPER of allowable reimbursable costs not covered by previous payments.
B. DEVELOPER shall submit within fifteen (15) days after the date of expiration of this Contract, all
financial, performance and other reports required by this Contract, and in addition, will cooperate in a
program audit by the City or its designee.
C. In the event a financial audit has not been performed prior to close out of this Contract, the City and
AGENCY retain the right to withhold a just and reasonable sum from the final payment to the
DEVELOPER until the final audit is performed, submitted to, and reviewed by the City and AGENCY.
Section XVIII – Reporting Responsibilities
DEVELOPER agrees to submit any and all quarterly reports requested by HUD or the CITY following
the date of this Contract. The CITY will send the DEVELOPER one reminder notice if the requested
report has not been received fourteen (14) days after the due date. If the DEVELOPER has not submitted
a report fourteen (14) days after the date on the reminder notice, the CITY will have the option to
terminate the contract as described in this Contract. In addition, the DEVELOPER agrees to provide the
AGENCY information as required to determine program eligibility, in meeting national objectives, and
financial records pertinent to the project. Additional reporting requirements are included in the Exhibits
hereto.
Section XIX – Inspection, Monitoring & Access to Records
A.CITY reserves the right to inspect, monitor, and observe work and services performed by the
DEVELOPER at any and all reasonable times. CITY reserves the right to audit the records of the
DEVELOPER any time during the performance of this Contract and for a period of ten (10) years after
final payment is made under this Contract. If required, the DEVELOPER will provide the AGENCY with
a certified audit of the DEVELOPER’s records representing the Fiscal Year during which the PROJECT
becomes complete whenever the amount listed in SECTION VII is at or exceeds $500,000, pursuant to
the requirements of 2 CFR Part 200. Access shall be immediately granted to the CITY, HUD, the
Comptroller General of the United States, or any of their duly authorized representatives to any books,
documents, papers, and records of the DEVELOPER or its contractors which are directly pertinent to that
specific contract for the purpose of making audit, examination, excerpts, and transcriptions.
DEVELOPER records shall include, but not be limited to, the following: payroll, personnel and
employment records, procurement bidding documents, contracts, sales closing statements, and invoices.
B.DEVELOPER agrees that the City may carry out monitoring and evaluation activities so as to ensure
compliance by DEVELOPER with this Contract, with HOME compliance documents, and with all other
laws, regulations, and ordinances related to the performance hereof. DEVELOPER agrees to provide the
City with any data determined by the City to be necessary for its effective fulfillment of its monitoring
and evaluation responsibilities. Failure to provide such data is a breach of this Contract and may result in
termination of this Contract.
C.Any program income shall be accounted for by the DEVELOPER, over the Contract time period, and
shall be reported to the City. Income is to be used to continue or benefit the program, as determined by
the intent and purpose of the Project.
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Section XX – Insurance
A. NO INSURANCE
It is understood that the City does not maintain liability insurance for the DEVELOPER and/or its
employees, agents, officers, and subcontractors.
B.COMMERCIAL LIABILITY INSURANCE
On or before the effective date of this Contract, the DEVELOPER shall provide the City with a
certificate of insurance and endorsement as proof of liability insurance in the amount of Two
Million Dollars ($2,000,000.00) per occurrence, combined single limit bodily injury and property
damage, and Four Million Dollars ($4,000,000.00) general aggregate. If DEVELOPER carries
higher coverage limits, such limits shall be shown on the Certificate of Insurance and
Endorsements and the City, its elected and appointed officials, employees, agents, attorneys and
volunteers shall be named as additional insureds for such higher limits. The certificate shall
clearly state who the provider is, the amount of coverage, the policy number, and when the policy
and provisions provided are in effect (any statement in the certificate to the effect of “this
certificate is issued as a matter of information only and confers no right upon the certificate
holder” shall be deleted). Said policy shall be in effect for the duration of this Contract. The
policy shall name the City of Yakima, its elected and appointed officials, officers, agents,
employees and volunteers as additional insureds, and shall contain a clause that the insurer will
not cancel or change the insurance without first giving the City thirty (30) calendar days prior
written notice. The insurance shall be with an insurance company or companies rated A-VII or
higher in Best’s Guide and admitted in the State of Washington. The requirements contained
herein, as well as City of Yakima’s review or acceptance of insurance maintained by
DEVELOPER is not intended to and shall not in any manner limit or qualify the liabilities or
obligations assumed by DEVELOPER under this Contract.
C.COMMERCIAL AUTOMOBILE LIABILITY INSURANCE
On or before the date this Contract is fully executed by the parties, DEVELOPER shall provide
the City with a certificate of insurance and endorsement as proof of commercial automobile
liability insurance with minimum liability limit of Two Million Dollars ($2,000,000.00) per
occurrence. If DEVELOPER carries higher coverage limits, such limits shall be shown on the
Certificate of Insurance and Endorsements and the City, its elected and appointed officials,
officers, employees, agents, attorneys and volunteers shall be named as additional insureds for
such higher limits. Automobile liability will apply to “Any Auto" and be shown on the
certificate. The certificate shall clearly state who the provider is, the amount of coverage, the
policy number, and when the policy and provisions provided are in effect (any statement in the
certificate to the effect of “this certificate is issued as a matter of information only and confers no
right upon the certificate holder” shall be deleted). Said policy shall be in effect for the duration
of this Contract. The policy shall name the City of Yakima, its elected and appointed officials,
officers, agents, employees and volunteers as additional insureds, and shall contain a clause that
the insurer will not cancel or change the insurance without first giving the City thirty (30)
calendar days prior written notice. The insurance shall be with an insurance company or
companies rated A-VII or higher in Best’s Guide and admitted in the State of Washington. The
requirements contained herein, as well as the City’s review or acceptance of insurance maintained
by DEVELOPER is not intended to and shall not in any manner limit or qualify the liabilities or
obligations assumed by DEVELOPER under this Contract. The business auto liability shall
include Hired and Non-Owned coverage if necessary.
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D. WORKERS’ COMPENSATION/EMPLOYER’S LIABILITY (Stop Gap)
The DEVELOPER, the Borrower, and all subcontractors shall at all time comply with all
applicable workers’ compensation, occupational disease, and occupational health and safety laws,
statutes, and regulations to the full extent applicable, and shall maintain Employer’s Liability
insurance with a limit of no less than One Million Dollars ($1,000,000.00). The City shall not be
held responsible in any way for claims filed by DEVELOPER or its employees for services
performed under the terms of this Contract. DEVELOPER agrees to assume full liability for all
claims arising from this Contract, including claims resulting from negligent acts of all
subcontractors. DEVELOPER is responsible to ensure subcontractors have insurance as needed.
Failure of subcontractors to comply with insurance requirements does not limit DEVELOPER’s
liability or responsibility. The DEVELOPER holds the City harmless for any injury or death to
the contractor’s employees while performing this Contract.
E.INSURANCE PROVIDED BY SUBCONTRACTORS & BORROWER
The DEVELOPER shall ensure that the Borrower and all subcontractors DEVELOPER and/or
Borrower utilizes for work/services rendered under this Contract shall comply with all of the
above insurance requirements. In all cases, DEVELOPER’s insurance coverage shall be primary
insurance with respect to those who are Additional Insureds under this Contract. Any insurance,
self-insurance or insurance pool coverage maintained by the City shall be in excess of the
DEVELOPER’s insurance and shall not contribute to it.
Section XXI – General Conditions
A. All notices or other communication which shall or may be given pursuant to this Contract shall be in
writing and shall be delivered by personal service, by overnight courier or by registered mail addressed to
the other party at the address indicated herein or as the same may be changed from time to time. Such
notice shall be deemed given on the day on which personally served; after one (1) business day if sent by
overnight courier or, if by mail, on the fifth day after being posted or the date of actual receipt, whichever
is earlier.
City address: City Manager
Yakima City Hall
129 North 2nd Street
Yakima, Washington 98901
Copy to: Office of Neighborhood Development Services
City of Yakima
112 South 8th Street
Yakima, Washington 98901 c
DEVELOPER: Catholic Charities Housing Services – Diocese of Yakima
Physical address: 5301 Tieton Dr. STE G
Yakima, WA 98908
With copies to: Kantor Taylor PC
901 Fifth Ave Avenue, Suite 1910
Seattle, Washington 98101
Attention: Mike Decina
22 of 28 City of Yakima
NEF Assignment Corporation
10 S. Riverside Plaza, Suite 1700
Chicago, Illinois 60606
Attn: General Counsel
projectnotices@nefinc.org with subject line of SMT
#81538
Barnes & Thornburg LLP
41 South High Street, Suite 3300
Columbus, Ohio 43215
Attn: Jordan Carr
B. Title and paragraph headings are for convenient reference and are not a part of this Contract.
C.In the event of conflict between the terms of this Contract and any terms or conditions contained in any
attached documents, a conflict or inconsistency shall be resolved by giving precedence in the following
order:
1. Appropriate provisions of state and federal statutes and regulations including HUD regulations
governing this Project.
2.The terms, requirements, and standards of Notice CPD-21-10 (Exhibit B).
3. Terms and Conditions (Exhibit A).
4. Those other attachments incorporated by reference herein, including the statement of work
and/or project description, and approved HUD budget, in the order in which they are attached.
5. City of Yakima Resolution authorizing this Contract.
6. Any other provisions whether incorporated by reference herein or otherwise, provided that
nothing herein shall be construed as giving preference to provisions of this Contract and/or loan
award over any provisions of law.
D.No waiver or breach of any provision of this Contract shall constitute a waiver of a subsequent breach
of the same or any other provision hereof, and no waiver shall be effective unless made in writing.
E. The parties hereto agree that this Contract shall be construed and enforced according to the laws of the
State of Washington. The venue for any action to enforce or interpret this Contract shall lie in the
Superior Court of Washington for Yakima County.
F. Should any provisions, paragraphs, sentences, words or phrases contained in this Contract be
determined by a court of competent jurisdiction to be invalid, illegal or otherwise unenforceable under the
laws of the State of Washington or the City of Yakima, such provisions, paragraphs, sentences, words or
phrases shall be deemed modified to the extent necessary in order to conform with such laws, or if not
modifiable to conform with such laws, then same shall be deemed severable, and in either event, the
remaining terms and provisions of this Contract shall remain unmodified and in full force and effect.
G.DEVELOPER shall comply with the provisions of the Copeland Anti-Kick-Back Act (18 U.S.C. 874)
as supplemented in the AGENCY of Labor Regulations (29 CFR Part 3), as amended.
H.DEVELOPER shall comply with the provisions of sections 103 and 107 of the Contract Work Hours
and Safety Standard Act (40 U.S.C. 327-330) as supplemented by AGENCY of Labor regulations (29
CFR, Part 5), as amended.
23 of 28 City of Yakima
I.DEVELOPER further warrants and agrees to include or cause to be included the criteria and
requirements of paragraphs (G) through (H) of this section in every nonexempt subcontract. The
DEVELOPER also agrees to take such action as the federal, state or local government may direct to
enforce aforesaid provisions.
J. The obligations undertaken by DEVELOPER pursuant to this Contract shall not be delegated or
assigned to any other person or agency unless CITY shall first consent to the performance or assignment
of such service or any part thereof by another person or agency.
K.This Contract shall be binding upon the parties hereto, their heirs, executors, legal representative,
successors and assigns. Modifications to this Contract shall be in writing and executed by both parties,
except for budget adjustments which process is specified above.
L.DEVELOPER agrees to release, indemnify, defend, and hold harmless the CITY, its elected and
appointed officials, officers, employees, agents, representatives, insurers, attorneys, and volunteers from
all liabilities, losses damages and expenses related to all claims, suits, arbitration actions, investigations,
and regulatory or other governmental proceedings arising from or in connection with this Contract or the
acts, failures to act, errors or omissions of the DEVELOPER, or any of DEVELOPER’S agents or
subcontractors, in performance of this Contract, except for claims caused by the CITY’S sole negligence.
The CITY’s right to indemnification includes attorney’s fees and costs associated with establishing the
right to indemnification hereunder in favor of the CITY.
M.DEVELOPER and its employees and agents shall be deemed to be independent contractors, and not
agents or employees of the CITY, and shall not attain any rights or benefits under the civil service or
pension ordinances of the CITY, or any rights generally afforded classified or unclassified employee;
further they shall not be deemed entitled to state Compensation benefits as an employee of the CITY.
N. Funding for this Contract is contingent on the availability of funds and continued authorization for
program activities and is subject to amendment or termination due to lack of funds, or authorization,
reduction of funds, and/or change in regulations.
O.The use or disclosure by any party of any confidential information concerning a recipient or client for
any purpose not directly connected with the City’s or the DEVELOPER’S responsibilities with respect to
services provided under this Contract is prohibited except on written consent of the recipient or client,
their attorney or their responsible parent or guardian or as otherwise provided by law.
P. DEVELOPER shall not assign or subcontract any portion of services provided within the terms of this
Contract without obtaining prior written approval from the City; provided, that the parties acknowledge
that the City will loan the funds awarded under this Contract to the Borrower. Any loan to Borrower of
the awarded funds shall be subject to all terms of this Contract. All terms and conditions of this Contract
shall apply to any approved subcontract or assignment related to the Contract.
Q. It is understood and agreed by the parties hereto that if any part, term, or provision of this Contract is
held by the courts to be illegal, the validity of the remaining provisions shall not be affected; and the
rights and obligations of the parties shall be construed and enforced as if the Contract did not contain the
particular provision held to be invalid. If it should appear that any provision hereof is in conflict with any
statutory provision of the United States or the State of Washington, said provisions which may conflict
therewith shall be deemed modified to conform to such statutory provision.
R. The parties to this Contract agree to deliver to the other party any additional documents that are
necessary or reasonably necessary to carry out the purposes and intent of this Contract.
24 of 28 City of Yakima
EXHIBIT “B”
[Insert Notice CPD-21-10]
U.S. Department of Housing and Urban Development
Community Planning and Development
Special Attention of:
CPD Division Directors
All HOME Coordinators
All HOME Participating Jurisdictions
Notice: CPD-21-10
Issued: September 13, 2021
Expires: This NOTICE is effective until it is
amended, superseded, or rescinded
Cross Reference: 24 CFR Part 92
Subject: Requirements for the Use of Funds in the HOME-American
Rescue Plan Program
Table of Contents
I.PURPOSE ........................................................................................................................ 2
II.BACKGROUND .............................................................................................................. 2
III.ESTABLISHMENT OF HOME-ARP REQUIREMENTS ......................................... 2
IV.QUALIFYING POPULATIONS, TARGETING AND PREFERENCES ................. 3
V.HOME-ARP ALLOCATION PLAN ........................................................................... 12
VI.ELIGIBLE ACTIVITIES ............................................................................................. 18
A.Administration and Planning .................................................................................... 18
B.HOME-ARP Rental Housing..................................................................................... 20
C.Tenant-Based Rental Assistance (TBRA) ................................................................. 38
D.Supportive Services .................................................................................................... 42
E.Acquisition and Development of Non-Congregate Shelter ..................................... 55
F.Nonprofit Operating and Capacity Building Assistance ......................................... 67
VII.OTHER FEDERAL REQUIREMENTS ..................................................................... 68
VIII.PROGRAM ADMINISTRATION .............................................................................. 75
IX.PERFORMANCE REVIEWS ...................................................................................... 95
X.FINDING OF NO SIGNIFICANT IMPACT ............................................................. 97
Appendix – Waivers and Alternative Requirements for HOME Investment Partnerships
Program – American Rescue Plan (HOME-ARP)
Nitiatl Tier2st
I.PURPOSE
This Notice establishes requirements for funds appropriated under section 3205 of the American
Rescue Plan Act of 2021 (P.L. 117-2) (“ARP”) for the HOME Investment Partnerships
Program (HOME) to provide homelessness assistance and supportive services.
II.BACKGROUND
On March 11, 2021, President Biden signed ARP into law, which provides over $1.9 trillion in
relief to address the continued impact of the COVID-19 pandemic on the economy, public
health, State and local governments, individuals, and businesses.
To address the need for homelessness assistance and supportive services, Congress
appropriated $5 billion in ARP funds to be administered through HOME to perform four
activities that must primarily benefit qualifying individuals and families who are homeless, at
risk of homelessness, or in other vulnerable populations. These activities include: (1)
development and support of affordable housing, (2) tenant-based rental assistance (TBRA), (3)
provision of supportive services; and (4) acquisition and development of non-congregate
shelter units. The program described in this notice for the use of the $5 billion in ARP funds is
the HOME-American Rescue Plan or “HOME-ARP.”
ARP defines qualifying individuals or families as those that are (1) homeless, as defined in
section 103(a) of the McKinney-Vento Homeless Assistance Act, as amended (42 U.S.C.
11302(a)) (“McKinney-Vento”); (2) at risk of homelessness, as defined in section 401 of
McKinney-Vento; (3) fleeing, or attempting to flee domestic violence, dating violence, sexual
assault, stalking, or human trafficking; (4) part of other populations where providing supportive
services or assistance would prevent a family’s homelessness or would serve those with the
greatest risk of housing instability; or (5) veterans and families that include a veteran family
member that meet the criteria in one of (1)-(4) above.
ARP authorized HUD to allocate HOME-ARP funds to states, units of general local
government, insular areas, and consortia of units of general local government that qualified
for an allocation of HOME funds in Fiscal Year (FY) 2021, pursuant to section 217 of the
Cranston-Gonzalez National Affordable Housing Act of 1990, as amended (42 U.S.C. 12701 et
seq.) (“NAHA”). On April 8, 2021, HUD allocated HOME-ARP funds to 651 grantees using
the HOME formula established at 24 CFR 92.50 and 92.60. The HOME-ARP allocation
amounts can be found here.
III.ESTABLISHMENT OF HOME-ARP REQUIREMENTS
ARP provides funds for homelessness and supportive services assistance under the HOME
statute of Title II of NAHA (42 U.S.C. 12721 et seq.) and authorizes the Secretary of HUD to
waive or specify alternative requirements for any provision of NAHA or regulation for the
administration of the HOME-ARP program, except requirements related to fair housing, civil
rights, nondiscrimination, labor standards, and the environment, upon a finding that the waiver
or alternative requirement is necessary to expedite or facilitate the use of HOME-ARP funds.
Pursuant to ARP, the per-unit cost limits (42 U.S.C. 12742(e)), commitment requirements (42
U.S.C. 12748(g)), matching requirements (42 U.S.C. 12750), and set-aside for housing
developed, sponsored, or owned by community housing development organizations (CHDOs)
(42 U.S.C. 12771) in NAHA do not apply to HOME-ARP funds.
This Notice describes the requirements applicable to a participating jurisdiction’s (PJ’s) use of
HOME-ARP funds. Consolidated plan requirements for HOME are in title I of NAHA and 24
CFR part 91. HOME program regulations are in 24 CFR part 92. Except as described in ARP
and this Notice, HOME statutory and regulatory provisions apply to a PJ’s use of HOME-ARP
funds. Sections I-IX of this Notice describe the HOME-ARP requirements imposed on a PJ for
the use of HOME-ARP funds to assist the qualifying populations through HOME-ARP projects
or activities. The Appendix describes the waivers and alternative requirements imposed on PJs
for the use of HOME-ARP funds and is included in any reference to “this Notice.” Specific
citations in the Notice shall mean the statute or regulation cited, as may be revised by the
Appendix to this Notice. PJs and insular areas must comply with all applicable statutory,
regulatory, and alternative requirements, as described in this Notice, including the Appendix.
IV.QUALIFYING POPULATIONS, TARGETING AND
PREFERENCES
ARP requires that funds be used to primarily benefit individuals and families in the following
specified “qualifying populations.” Any individual or family who meets the criteria for these
populations is eligible to receive assistance or services funded through HOME-ARP without
meeting additional criteria (e.g., additional income criteria). All income calculations to meet
income criteria of a qualifying population or required for income determinations in HOME-
ARP eligible activities must use the annual income definition in 24 CFR 5.609 in accordance
with the requirements of 24 CFR 92.203(a)(1).
A.Qualifying Populations
1.Homeless, as defined in 24 CFR 91.5 Homeless (1), (2), or (3):
(1) An individual or family who lacks a fixed, regular, and adequate nighttime residence,
meaning:
(i) An individual or family with a primary nighttime residence that is a public or private
place not designed for or ordinarily used as a regular sleeping accommodation for
human beings, including a car, park, abandoned building, bus or train station, airport, or
camping ground;
(ii) An individual or family living in a supervised publicly or privately operated shelter
designated to provide temporary living arrangements (including congregate shelters,
transitional housing, and hotels and motels paid for by charitable organizations or by
federal, state, or local government programs for low-income individuals); or
(iii) An individual who is exiting an institution where he or she resided for 90 days or
less and who resided in an emergency shelter or place not meant for human habitation
immediately before entering that institution;
(2) An individual or family who will imminently lose their primary nighttime residence,
provided that:
(i) The primary nighttime residence will be lost within 14 days of the date of application
for homeless assistance;
(ii) No subsequent residence has been identified; and
(iii) The individual or family lacks the resources or support networks, e.g., family,
friends, faith-based or other social networks needed to obtain other permanent housing;
(3) Unaccompanied youth under 25 years of age, or families with children and youth, who
do not otherwise qualify as homeless under this definition, but who:
(i) Are defined as homeless under section 387 of the Runaway and Homeless Youth Act
(42 U.S.C. 5732a), section 637 of the Head Start Act (42 U.S.C. 9832), section 41403 of
the Violence Against Women Act of 1994 (42 U.S.C. 14043e-2), section 330(h) of the
Public Health Service Act (42 U.S.C. 254b(h)), section 3 of the Food and Nutrition Act
of 2008 (7 U.S.C. 2012), section 17(b) of the Child Nutrition Act of 1966 (42 U.S.C.
1786(b)), or section 725 of the McKinney-Vento Homeless Assistance Act (42 U.S.C.
11434a);
(ii) Have not had a lease, ownership interest, or occupancy agreement in permanent
housing at any time during the 60 days immediately preceding the date of application for
homeless assistance;
(iii) Have experienced persistent instability as measured by two moves or more during
the 60-day period immediately preceding the date of applying for homeless assistance;
and
(iv) Can be expected to continue in such status for an extended period of time because of
chronic disabilities, chronic physical health or mental health conditions, substance
addiction, histories of domestic violence or childhood abuse (including neglect), the
presence of a child or youth with a disability, or two or more barriers to employment,
which include the lack of a high school degree or General Education Development
(GED), illiteracy, low English proficiency, a history of incarceration or detention for
criminal activity, and a history of unstable employment;
2.At risk of Homelessness, as defined in 24 CFR 91.5 At risk of homelessness:
(1) An individual or family who:
(i) Has an annual income below 30 percent of median family income for the area, as
determined by HUD;
(ii) Does not have sufficient resources or support networks, e.g., family, friends, faith-
based or other social networks, immediately available to prevent them from moving to
an emergency shelter or another place described in paragraph (1) of the “Homeless”
definition in this section; and
(iii) Meets one of the following conditions:
(A) Has moved because of economic reasons two or more times during the 60 days
immediately preceding the application for homelessness prevention assistance;
(B) Is living in the home of another because of economic hardship;
(C) Has been notified in writing that their right to occupy their current housing or
living situation will be terminated within 21 days after the date of application for
assistance;
(D) Lives in a hotel or motel and the cost of the hotel or motel stay is not paid by
charitable organizations or by federal, State, or local government programs for low-
income individuals;
(E) Lives in a single-room occupancy or efficiency apartment unit in which there
reside more than two persons or lives in a larger housing unit in which there reside
more than 1.5 people per room, as defined by the U.S. Census Bureau;
(F) Is exiting a publicly funded institution, or system of care (such as a health-care
facility, a mental health facility, foster care or other youth facility, or correction
program or institution); or
(G) Otherwise lives in housing that has characteristics associated with instability and
an increased risk of homelessness, as identified in the recipient's approved
consolidated plan;
(2) A child or youth who does not qualify as “homeless” under this section, but qualifies as
“homeless” under section 387(3) of the Runaway and Homeless Youth Act (42 U.S.C.
5732a(3)), section 637(11) of the Head Start Act (42 U.S.C. 9832(11)), section 41403(6) of
the Violence Against Women Act of 1994 (42 U.S.C. 14043e-2(6)), section 330(h)(5)(A)
of the Public Health Service Act (42 U.S.C. 254b(h)(5)(A)), section 3(l) of the Food and
Nutrition Act of 2008 (7 U.S.C. 2012(l)), or section 17(b)(15) of the Child Nutrition Act of
1966 (42 U.S.C. 1786(b)(15)); or
(3) A child or youth who does not qualify as “homeless” under this section but qualifies as
“homeless” under section 725(2) of the McKinney-Vento Homeless Assistance Act (42
U.S.C. 11434a(2)), and the parent(s) or guardian(s) of that child or youth if living with her
or him.
3.Fleeing, or Attempting to Flee, Domestic Violence, Dating Violence, Sexual Assault,
Stalking, or Human Trafficking, as defined by HUD.
For HOME-ARP, this population includes any individual or family who is fleeing, or is
attempting to flee, domestic violence, dating violence, sexual assault, stalking, or human
trafficking. This population includes cases where an individual or family reasonably
believes that there is a threat of imminent harm from further violence due to dangerous
or life-threatening conditions that relate to violence against the individual or a family
member, including a child, that has either taken place within the individual’s or family’s
primary nighttime residence or has made the individual or family afraid to return or
remain within the same dwelling unit. In the case of sexual assault, this also includes
cases where an individual reasonably believes there is a threat of imminent harm from
further violence if the individual remains within the same dwelling unit that the
individual is currently occupying, or the sexual assault occurred on the premises during
the 90-day period preceding the date of the request for transfer.
Domestic violence, which is defined in 24 CFR 5.2003 includes felony or misdemeanor
crimes of violence committed by:
1)A current or former spouse or intimate partner of the victim (the term “spouse
or intimate partner of the victim” includes a person who is or has been in a
social relationship of a romantic or intimate nature with the victim, as
determined by the length of the relationship, the type of the relationship, and
the frequency of interaction between the persons involved in the relationship);
2)A person with whom the victim shares a child in common;
3)A person who is cohabitating with or has cohabitated with the victim as a
spouse or intimate partner;
4)A person similarly situated to a spouse of the victim under the domestic or
family violence laws of the jurisdiction receiving HOME-ARP funds; or
5)Any other person against an adult or youth victim who is protected from that
person's acts under the domestic or family violence laws of the jurisdiction.
Dating violence which is defined in 24 CFR 5.2003 means violence committed by a
person:
1)Who is or has been in a social relationship of a romantic or intimate nature
with the victim; and
2)Where the existence of such a relationship shall be determined based
on a consideration of the following factors:
a.The length of the relationship;
b.The type of relationship; and
c.The frequency of interaction between the persons involved in the
relationship.
Sexual assault which is defined in 24 CFR 5.2003 means any nonconsensual
sexual act proscribed by Federal, Tribal, or State law, including when the victim
lacks capacity to consent.
Stalking which is defined in 24 CFR 5.2003 means engaging in a course of conduct
directed at a specific person that would cause a reasonable person to:
1)Fear for the person’s individual safety or the safety of others; or
2)Suffer substantial emotional distress.
Human Trafficking includes both sex and labor trafficking, as outlined in the
Trafficking Victims Protection Act of 2000 (TVPA), as amended (22 U.S.C. 7102).
These are defined as:
1)Sex trafficking means the recruitment, harboring, transportation, provision,
obtaining, patronizing, or soliciting of a person for the purpose of a commercial
sex act, in which the commercial sex act is induced by force, fraud, or coercion,
or in which the person induced to perform such act has not attained 18 years of
age; or
2)Labor trafficking means the recruitment, harboring, transportation, provision, or
obtaining of a person for labor or services, through the use of force, fraud, or
coercion for the purpose of subjection to involuntary servitude, peonage, debt
bondage, or slavery.
4.Other Populations where providing supportive services or assistance under section
212(a) of NAHA (42 U.S.C. 12742(a)) would prevent the family’s homelessness or
would serve those with the greatest risk of housing instability. HUD defines these
populations as individuals and households who do not qualify under any of the
populations above but meet one of the following criteria:
(1)Other Families Requiring Services or Housing Assistance to Prevent
Homelessness is defined as households (i.e., individuals and families) who have
previously been qualified as “homeless” as defined in 24 CFR 91.5, are currently
housed due to temporary or emergency assistance, including financial assistance,
services, temporary rental assistance or some type of other assistance to allow the
household to be housed, and who need additional housing assistance or supportive
services to avoid a return to homelessness.
(2)At Greatest Risk of Housing Instability is defined as household who meets either
paragraph (i) or (ii) below:
(i)has annual income that is less than or equal to 30% of the area median income, as
determined by HUD and is experiencing severe cost burden (i.e., is paying more than
50% of monthly household income toward housing costs);
(ii)has annual income that is less than or equal to 50% of the area median income, as
determined by HUD, AND meets one of the following conditions from paragraph (iii)
of the “At risk of homelessness” definition established at 24 CFR 91.5:
(A) Has moved because of economic reasons two or more times during the 60 days
immediately preceding the application for homelessness prevention assistance;
(B)Is living in the home of another because of economic hardship;
(C)Has been notified in writing that their right to occupy their current housing or
living situation will be terminated within 21 days after the date of application for
assistance;
(D) Lives in a hotel or motel and the cost of the hotel or motel stay is not paid by
charitable organizations or by Federal, State, or local government programs for
low-income individuals;
(E)Lives in a single-room occupancy or efficiency apartment unit in which there
reside more than two persons or lives in a larger housing unit in which there reside
more than 1.5 persons reside per room, as defined by the U.S. Census Bureau;
(F)Is exiting a publicly funded institution, or system of care (such as a health-care
facility, a mental health facility, foster care or other youth facility, or correction
program or institution); or
(G) Otherwise lives in housing that has characteristics associated with instability and
an increased risk of homelessness, as identified in the recipient's approved
consolidated plan
Veterans and Families that include a Veteran Family Member that meet the criteria for one
of the qualifying populations described above are eligible to receive HOME-ARP assistance.
B.Use of Funds to Benefit Qualifying Populations
ARP states that funds must be used to primarily benefit the qualifying populations through the
four eligible activities: (1) TBRA, (2) development and support of affordable housing, (3)
provision of supportive services; and (4) acquisition and development of non-congregate shelter
(NCS) units. Recognizing the urgent needs of individuals and families in qualifying
populations, HUD is requiring that:
100% of HOME-ARP funds used by a PJ for TBRA, supportive services, and
acquisition and development of non-congregate shelter units must benefit individuals
and families in qualifying populations. Individuals and families in qualifying
populations may be assisted by one or more of the HOME-ARP eligible activities,
consistent with the requirements in this Notice.
Not less than 70 percent of affordable rental housing units acquired, rehabilitated, or
constructed with HOME-ARP funds by a PJ must be occupied by households in the
qualifying populations. Units that are not restricted to occupancy by qualifying
populations are subject to income targeting and rent requirements established under the
HOME-ARP Rental Program rules and are only permitted in projects with rental units
restricted for occupancy by qualifying populations.
HUD recognizes that, because many households in the qualifying populations are unable to pay
rents sufficient to cover unit operating costs, PJs and project owners should attempt to obtain
Federal or state project-based rental subsidies, if available. Since project-based rental subsidies
can be difficult to secure, additional flexibility may be necessary to structure and underwrite
projects so that they remain both affordable and financially viable. HUD is providing PJs with
additional flexibilities in Section VI.B. to structure and underwrite HOME-ARP rental projects
so they remain financially viable during the minimum compliance period. One of these
flexibilities is permitting up to 30 percent of HOME-ARP rental housing units funded by a PJ to
be occupied by low-income households. PJs are encouraged to use this flexibility only when it
is required to facilitate development of a HOME-ARP rental project.
PJs must determine and document that households meet the definition of a qualifying
population or, for the portion of HOME-ARP rental units not restricted to these populations,
that households are low-income.
C.Preferences Among Qualifying Populations, Referral Methods, and
Subpopulations
1. Preferences
ARP establishes the qualifying populations that are eligible for assistance with HOME-ARP
funds. A PJ may establish reasonable preferences among the qualifying populations to
prioritize applicants for HOME-ARP projects or activities based on the PJ’s needs and
priorities, as described in its HOME-ARP allocation plan. For example, a PJ may set a
preference among qualifying individuals and families for a HOME-ARP non-congregate shelter
for individuals and families who are homeless; fleeing or attempting to flee domestic violence,
dating violence, sexual assault, stalking, or human trafficking; and veterans and families with a
veteran family member that meet the criteria of one of these prior qualifying populations,
consistent with its HOME-ARP allocation plan.
The PJ must comply with all applicable fair housing, civil rights, and nondiscrimination
requirements, including but not limited to those requirements listed in 24 CFR 5.105(a) when
applying preferences through its referral methods. Persons who are eligible for a preference
must have the opportunity to participate in all HOME-ARP activities of the PJ in which they are
eligible under this Notice, including activities that are not separate or different, and cannot be
excluded because of any protected characteristics or preferential status.
Targeted assistance: If HOME-ARP funds are used for TBRA, the PJ may establish a
preference for individuals with special needs or persons with disabilities among the HOME-
ARP qualifying populations. Within the qualifying populations, participation may be limited to
persons with a specific disability only, if necessary, to provide effective housing, aid, benefit, or
services that would be as effective as those provided to others in accordance with 24 CFR
8.4(b)(1)(iv). The PJ may also provide a preference for a specific category of individuals with
disabilities (e.g., persons with HIV/AIDS or chronic mental illness) within the qualifying
populations only if the specific category is identified in the PJ’s HOME-ARP allocation plan as
having unmet need and the preference is needed to narrow the gap in benefits and services
received by such persons.
2.Referral Methods for Projects or Activities
A PJ may use the referral methods described below to administer HOME-ARP assistance to
qualifying individuals and families. Regardless of the referral method used by the PJ, HUD
holds the PJ responsible for determining and documenting that beneficiaries meet the definition
of a qualifying population or, for the portion of HOME-ARP rental units not restricted to
qualifying populations, that beneficiaries are low-income.
A PJ may use the coordinated entry or coordinated entry process (CE) of a continuum of care
(CoC) for referrals for projects and activities as described below. Under 24 CFR 578.3, a CE is
a centralized or coordinated process designed to coordinate program participant intake
assessment and provision of referrals within a defined area. HUD requires each CoC to establish
and operate a CE with the goal of increasing the efficiency of local crisis response systems and
improving fairness and ease of access to resources, including mainstream resources. A PJ may
permit a CoC CE to collect information and documentation required to determine whether an
individual or family meets the criteria of a HOME-ARP qualifying population at any point in
the coordinated entry process, (i.e., after or concurrently with the assessment and intake
processes) as long as that information is not used to rank a person for HOME-ARP assistance
other than as specified by the preferences or method of prioritization established by the PJ, in
accordance with HOME-ARP requirements. If the PJ uses CE, the PJ cannot require HOME-
ARP victim service providers to use the CE but may permit them to do so.
The PJ must comply with all applicable nondiscrimination and equal opportunity laws and
requirements listed in 24 CFR 5.105(a) and any other applicable fair housing and civil rights
laws and requirements when using the following referral methods:
i.Use of Expanded CE in HOME-ARP
Under this referral method, a PJ may use a CE established by a CoC operating within its
boundaries for one or more projects or activities if the CE accepts all HOME-ARP
qualifying populations eligible for those activities or projects, in accordance with the
preferences and prioritization, if any, established or approved by the PJ in its HOME-ARP
allocation plan and imposed through the PJ’s written agreements.
Before using a CoC’s CE, PJs should consider whether the CE covers the same service area
as the HOME-ARP project or activity that would use that CE. At a minimum, the PJ must
establish policies and procedures that describe the relationship of the geographic area(s)
served by the project or activity to the geographic area(s) covered by the CoC CE and
address how the CE will provide access and implement uniform referral processes in
situations where a project’s geographic area(s) is broader than the geographic area(s)
covered by the CE.
The PJ must require a project or activity to use CE along with other referral methods (as
provided in section ii below) or to use only a project/activity waiting list (as provided in
section iii below) if:
1.the CE does not have a sufficient number of qualifying individuals and families to
refer to the PJ for the project or activity;
2.the CE does not include all HOME-ARP qualifying populations; or,
3.the CE fails to provide access and implement uniform referral processes in situations
where a project’s geographic area(s) is broader than the geographic area(s) covered
by the CE.
ii.Use of CE with Other Referral Methods
The PJ may use a CoC CE with additional referrals from outside organizations or project-
specific waiting lists consistent with HOME-ARP requirements. If using this referral
method, the PJ must establish or approve any preferences or prioritization criteria applied by
a CoC CE or other referral sources. The PJ may also use a waiting list to receive referrals
from a CoC CE and other referral agencies for a project or activity, where a CoC CE or
referral agency refers an applicant that is placed on the waiting list for that project or
activity in chronological order.
If applicable, a PJ must establish policies and procedures for applying a PJ’s established
preferences and method of prioritization, if any, when accepting direct referrals from a CoC
CE and other referral agencies and must document that such the policies and procedures
were followed for each applicant served.
iii.Use of a Project/Activity Waiting List
The PJ may establish a waiting list for each HOME-ARP project or activity. All qualifying
individuals or families must have access to apply for placement on the waiting list for an
activity or project. Qualifying individuals or families on a waiting list must be accepted in
accordance with the PJ’s preferences, if any, consistent with this Notice or, if the PJ did not
establish preferences, in chronological order, insofar as practicable.
3. Limiting Eligibility to Subpopulations
PJs must follow all applicable fair housing, civil rights, and nondiscrimination requirements,
including but not limited to those requirements listed in 24 CFR 5.105(a). This includes, but is
not limited to, the Fair Housing Act, Title VI of the Civil Rights Act, section 504 of
Rehabilitation Act, HUD’s Equal Access Rule, and the Americans with Disabilities Act, as
applicable.
HOME-ARP rental housing or NCS may be limited to a specific subpopulation of a qualifying
population identified in Section IV.A. of this Notice, so long as admission does not discriminate
against any protected class under federal nondiscrimination laws in 24 CFR 5.105 (e.g., the
housing may be limited to homeless households and at risk of homelessness households,
veterans and their families, victims of domestic violence, dating violence, sexual assault,
stalking or human trafficking and their families).
Recipients may limit admission to or provide a preference for HOME-ARP rental housing or
NCS to households who need the specialized supportive services that are provided (e.g.,
domestic violence services). However, no otherwise eligible individuals with disabilities or
families including an individual with a disability who may benefit from the services provided
may be excluded on the grounds that they do not have a particular disability.
Consistent with the statutory authority under ARP, HOME-ARP NCS may be converted to
permanent housing under the CoC program or used as shelters under the ESG program, when all
program and fair housing and nondiscrimination requirements are met. As such, HOME-ARP
NCS may need to limit eligibility to households that are homeless and/or at risk of
homelessness if the shelter will be converted to permanent housing under the CoC program or
used as an emergency shelter in the ESG program.
V.HOME-ARP ALLOCATION PLAN
PJs develop annual action plans as part of their application for HOME funding. To receive its
HOME-ARP funds, a PJ must engage in consultation and public participation processes and
develop a HOME-ARP allocation plan that meets the requirements established in this section of
the Notice and submit it to HUD as a substantial amendment to its Fiscal Year 2021 annual
action plan. HUD is using the waiver and alternative requirement authority provided by ARP to
establish requirements for the HOME-ARP allocation plan in this Notice. The HOME-ARP
allocation plan must describe how the PJ intends to distribute HOME-ARP funds, including
how it will use these funds to address the needs of HOME-ARP qualifying populations. A PJ’s
HOME-ARP allocation plan must include:
A summary of the consultation process and results of upfront consultation;
A summary of comments received through the public participation process and a
summary of any comments or recommendations not accepted and the reasons why;
A description of HOME-ARP qualifying populations within the jurisdiction;
An assessment of unmet needs of each qualifying population;
An assessment of gaps in housing and shelter inventory, homeless assistance and
services, and homelessness prevention service delivery system;
A summary of the planned use of HOME-ARP funds for eligible activities based on the
unmet needs of the qualifying populations;
An estimate of the number of housing units for qualifying populations the PJ will
produce or preserve with its HOME-ARP allocation; and
A description of any preferences for individuals and families in a particular qualifying
population or a segment of a qualifying population.
All the above required elements of the HOME-ARP allocation plan shall be part of the FY 2021
annual action plan for purposes of the HOME-ARP program. Consequently, PJs are not
required to amend their consolidated plans.
A.Consultation
Before developing its HOME-ARP allocation plan, a PJ must consult with agencies and service
providers whose clientele include the HOME-ARP qualifying populations to identify unmet
needs and gaps in housing or service delivery systems. In addition, a PJ should use consultation
to determine the HOME-ARP eligible activities currently taking place within its jurisdiction and
potential collaborations for administering HOME-ARP. This consultation will provide a basis
for the PJ’s strategy for distributing HOME-ARP funds for eligible activities to best meet the
needs of qualifying populations. At a minimum, a PJ must consult with the CoC(s) serving the
jurisdiction’s geographic area, homeless and domestic violence service providers, veterans’
groups, public housing agencies (PHAs), public agencies that address the needs of the
qualifying populations, and public or private organizations that address fair housing, civil rights,
and the needs of persons with disabilities. State PJs are not required to consult with every PHA
or CoC within the state’s boundaries; however, local PJs must consult with all PHAs (including
statewide or regional PHAs) and CoCs serving the jurisdiction. In its plan, a PJ must describe
its consultation process, list the organizations consulted, and summarize the feedback received
from these entities.
B.Public Participation
PJs must provide for and encourage citizen participation in the development of the HOME-ARP
allocation plan. Before submitting the HOME-ARP allocation plan to HUD, PJs must provide
residents with reasonable notice and an opportunity to comment on the proposed HOME-ARP
allocation plan of no less than 15 calendar days. The PJ must follow its adopted requirements
for “reasonable notice and an opportunity to comment” for plan amendments in its current
citizen participation plan. In addition, PJs must hold at least one public hearing during the
development of the HOME-ARP allocation plan prior to submitting the plan to HUD.
For the purposes of HOME-ARP, PJs are required to make the following information available
to the public:
The amount of HOME-ARP funds the PJ will receive.
The range of activities the PJ may undertake.
A PJ must consider any comments or views of residents received in writing, or orally at a public
hearing, when preparing the HOME-ARP allocation plan. In its plan, a PJ must describe its
public participation process, including any efforts made to broaden public participation. In its
plan, the PJ must also include a summary of comments and recommendations received through
the public participation process and any comments or recommendations not accepted and the
reasons why.
Throughout the HOME-ARP allocation plan public participation process, the PJ must follow its
applicable fair housing and civil rights requirements and procedures for effective
communication, accessibility and reasonable accommodation for persons with disabilities and
providing meaningful access to participation by limited English proficient (LEP) residents that
are in its current citizen participation plan as required by 24 CFR 91.105 and 91.115.
C.HOME-ARP Allocation Plan Requirements
The HOME-ARP allocation plan must describe the distribution of HOME-ARP funds and the
process for soliciting applications and/or selecting eligible projects. The plan must also identify
any preferences being established for eligible activities or projects. However, PJs are not
required to identify specific projects that will be funded in the HOME-ARP allocation plan.
1.Needs Assessment and Gaps Analysis: A PJ must evaluate the size and demographic
composition of qualifying populations within its boundaries and assess the unmet needs of
those populations. In addition, a PJ must identify any gaps within its current shelter and
housing inventory as well as the service delivery system. A PJ should use current data,
including point in time count, housing inventory count, or other data available through
CoCs, and consultations with service providers to quantify the individuals and families in
the qualifying populations and their need for additional housing, shelter, or services. A PJ
should identify and consider the current resources available to assist qualifying populations,
including congregate and non-congregate shelter units, supportive services, TBRA, and
affordable and permanent supportive rental housing. A PJ must consider the housing and
service needs of qualifying populations, including but not limited to:
Sheltered and unsheltered homeless populations;
Those currently housed populations at risk of homelessness;
Other families requiring services or housing assistance to prevent homelessness; and
Those at greatest risk of housing instability or in unstable housing situations.
A PJ should include data in its HOME-ARP allocation plan that describes the qualifying
populations.
In addition, a PJ must include a narrative description that:
Identifies the characteristics of housing associated with instability and an increased
risk of homelessness if the PJ will include such conditions under HUD’s definition
of “other populations” as established in Section IV.A.4.2.ii.G. of this Notice.
Identifies the PJ’s priority needs for qualifying populations; and,
Explains how the PJ determined the level of need and gaps in its shelter and housing
inventory and service delivery systems.
2.HOME-ARP Activities: The HOME-ARP allocation plan must describe how a PJ will
distribute HOME-ARP funds in accordance with its priority needs. The plan must describe
the PJ’s method for soliciting applications for funding and/or selecting developers, service
providers, subrecipients and/or contractors and whether the PJ will administer eligible
activities directly. If the PJ will provide any portion of its HOME-ARP administrative
funds to a subrecipient or contractor prior to HUD’s acceptance of the PJ’s HOME-ARP
allocation plan because the subrecipient or contractor is responsible for the administration of
the PJ’s entire HOME-ARP grant, the plan must identify the subrecipient or contractor and
describe its role and responsibilities in administering all of the PJ’s HOME-ARP program.
PJs must indicate in the HOME-ARP allocation plan the amount of HOME-ARP funding
that is planned for each eligible HOME-ARP activity type, including administrative and
planning activities. In addition, a PJ must demonstrate that any planned funding for
nonprofit organization operating assistance, as described in Section VI.F, nonprofit capacity
building, and administrative costs is within HOME-ARP limits. PJs must also include a
narrative description about how the characteristics of its shelter and housing inventory,
service delivery system, and the needs identified in the PJ’s gap analysis provided a
rationale for its plan to fund eligible activities.
3.HOME-ARP Production Housing Goals: The HOME-ARP allocation plan must estimate
the number of affordable rental housing units for qualifying populations that a PJ will
produce or support with its HOME-ARP allocation. The plan must also include a narrative
about the specific affordable rental housing production goal that the PJ hopes to achieve and
describe how it will address the PJ’s priority needs.
4.Preferences: The HOME-ARP allocation plan must identify whether the PJ intends to give
preference to one or more qualifying populations or a subpopulation within one or more
qualifying populations for any eligible activity or project. For example, PJs may include a
preference for:
homeless individuals and families as defined in the ESG and CoC programs;
individuals with special needs or persons with disabilities among qualifying
individuals and families;
a specific category of qualifying individuals and families (e.g., chronically homeless
as defined in 24 CFR 91.5).
PJs are not required to describe specific projects to which the preferences will apply in the
HOME-ARP allocation plan. However, a PJ must explain how the use of a preference or
method of prioritization will address the unmet need or gap in benefits and services received
by individuals and families in the qualifying population or category of qualifying
population, consistent with the PJ’s needs assessment and gap analysis. The PJ must also
describe how it will still address the unmet needs or gaps in benefits and services of the
other qualifying populations that are not included in a preference through the use of HOME-
ARP funds.
Preferences cannot violate any applicable fair housing, civil rights, and nondiscrimination
requirements, including but not limited to those requirements listed in 24 CFR 5.105(a).
The PJ must comply with all applicable nondiscrimination and equal opportunity laws and
requirements listed in 24 CFR 5.105(a) and any other applicable fair housing and civil rights
laws and requirements when establishing preferences or methods of prioritization.
5.HOME-ARP Refinancing Guidelines: If a PJ intends to use HOME-ARP funds to
refinance existing debt secured by multifamily rental housing that is being rehabilitated with
HOME-ARP funds, it must state its refinancing guidelines in accordance with 24 CFR
92.206(b)(2). The guidelines must describe the conditions under with the PJ will refinance
existing debt for a HOME-ARP rental project. At a minimum, the guidelines must:
Establish a minimum level of rehabilitation per unit or a required ratio between
rehabilitation and refinancing to demonstrate that rehabilitation of HOME-ARP
rental housing is the primary eligible activity.
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 qualified populations for the minimum compliance
period can be demonstrated.
State whether the new investment is being made to maintain current affordable units,
create additional affordable units, or both.
Specify whether the required compliance period is the minimum 15 years or longer.
State that HOME-ARP funds cannot be used to refinance multifamily loans made or
insured by any federal program, including CDBG.
6.Substantial Amendments to the HOME-ARP Allocation Plan: PJs must make a
substantial amendment to the HOME-ARP allocation plan for changes in the method of
distributing funds; to carry out an activity not previously described in the plan; or, to change
the purpose, scope, location, or beneficiaries of an activity, including new preferences not
previously described in the plan. In addition, the requirements for substantial amendments
at 24 CFR 92.63 apply to the HOME-ARP allocation plan for insular areas. PJs are not
required to make a substantial amendment to describe individual projects selected for
funding if the eligible activity is included in the PJ’s plan. PJs must make the proposed
substantial amendment public and provide for a 15-day public comment period prior to
submission. Upon completion of the public comment period, PJs must submit substantial
amendments to HUD in accordance with the process for submitting the HOME-ARP
allocation plan as described in Section V.D.
7.Certifications and SF-424: PJs must submit the required certifications in accordance with
the requirements in this Notice, including the following:
a.Affirmatively Further Fair Housing;
b.Uniform Relocation Assistance and Real Property Acquisition Policies Act and Anti-
displacement and Relocation Assistance Plan;
c.Anti-Lobbying;
d.Authority of Jurisdiction;
e.Section 3; and,
f.HOME-ARP specific certification that a PJ will only use HOME-ARP funds consistent
with ARP and the HOME-ARP Notice for eligible activities and eligible costs.
PJs must also submit the SF-424, SF-424B, and SF-424D with the HOME-ARP allocation
plan.
D.Submission and Review Process
1.HOME-ARP Submission and the eCon Planning Suite: Upon completion of the HOME-
ARP allocation plan, a PJ must submit the HOME-ARP allocation plan to HUD. To submit
the HOME-ARP allocation plan, PJs must follow the process in IDIS to make an
amendment to the Fiscal Year (FY) 2021 annual action plan. Once the FY 2021 annual
action plan is reopened, a PJ must upload a Microsoft Word or PDF version of the plan as
an attachment next to the “HOME-ARP allocation plan” option on the AD-26 screen (for
PJs whose FY. 2021 annual action plan is a Year 2-5 annual action plan) or the AD-25
screen (for PJs whose FY 2021 annual action plan is a Year 1 annual action plan that is part
of the 2021 consolidated plan), unless instructed by HUD to follow a different submission
procedure. PJs are not required to make any other edits to the FY 2021 annual action plan
or applicable consolidated plan screens in the eCon Planning Suite. For more information
on how to upload an attachment in the eCon Planning Suite, PJs can refer to the eCon
Planning Suite Desk Guide.
2.HUD Review of the HOME-ARP Allocation Plan: The PJ must submit its HOME-ARP
allocation plan to HUD for review in accordance with 24 CFR 91.500, as revised by this
Notice. Unless instructed otherwise by HUD, the HOME-ARP allocation plan is received
by HUD when the SF-424 is submitted electronically, which means that it is uploaded in the
eCon Planning Suite as an attachment on AD-25 or AD-26 screen, as applicable, and the
action plan status is changed to “Submitted for Review.” HUD will review a PJ’s HOME-
ARP allocation plan to determine that it is:
Substantially complete, and
Consistent with the purposes of ARP.
HUD may disapprove a PJ’s HOME-ARP allocation plan in accordance with 24 CFR
91.500(b). HUD may also disapprove a HOME-ARP allocation plan or a portion of a plan
if HUD determines that the plan is inconsistent with the purposes of ARP or substantially
incomplete. A PJ’s plan is inconsistent with ARP if it allocates HOME-ARP funds for uses
other than a HOME-ARP eligible activity, as described in this Notice. A PJ’s HOME-ARP
allocation plan is substantially incomplete if:
The PJ does not complete the required public participation or consultation or fails to
describe those efforts in the plan;
The PJ fails to include the required elements outlined in this Notice, including the
amount of HOME-ARP funds for each eligible HOME-ARP activity type;
The PJ fails to identify and describe the responsibilities of the subrecipient or
contractor administering all of its HOME-ARP award, if applicable; or,
HUD rejects the PJ’s HOME-ARP certification as inaccurate.
In accordance with section 105(c) of NAHA (42 U.S.C. 12705(c)) and 24 CFR 91.500(a), if
the PJ’s HOME-ARP allocation plan is not disapproved within 45 days, then the plan is
deemed approved 45 days after HUD receives the plan, and HUD shall notify the PJ that the
plan is accepted.
If HUD determines that the plan is substantially incomplete or that the plan is inconsistent
with ARP, HUD will notify the PJ in writing with the reasons for disapproval, in accordance
with 24 CFR 91.500(c). If a PJ’s plan is disapproved, the PJ may revise or resubmit the
plan for HUD review within 45 days after the first notification of disapproval. HUD will
respond to accept or disapprove the resubmitted plan within 30 days of receiving the
revisions or resubmission.
Once HUD notifies a PJ that the plan is accepted, the PJ must make the final HOME-ARP
allocation plan available to the public in accordance with the same requirements in the PJ’s
current citizen participation plan that are followed to make the PJ’s adopted consolidated
plan and substantial amendments available to the public, including the availability of
materials in a form accessible to persons with disabilities, and translated materials in
different languages to accommodate LEP persons, upon request.
3.HUD Review of the HOME-ARP Allocation Plan for Insular Areas: In addition to the
standards for review described in Section V.D.2, HUD will review an insular area’s HOME-
ARP allocation plan in accordance with 24 CFR 92.62. If HUD cannot make a
determination based on the information submitted that the HOME-ARP allocation plan
complies with HOME-ARP allocation plan requirements, or if the eligible activities
described in the plan are not within the insular area’s management capability as
demonstrated by past performance in housing and community development programs, HUD
will notify the insular area within 30 days of receipt of the HOME-ARP allocation plan that
supporting documentation is needed. The insular area will have a mutually agreed upon
period to submit the necessary supporting information or to revise the eligible activities in
its HOME-ARP allocation plan.
VI.ELIGIBLE ACTIVITIES
A.Administration and Planning
The PJ may expend, for payment of reasonable administrative and planning costs, up to 15
percent of its HOME-ARP allocation. Reasonable administrative and planning costs for the
HOME-ARP program include:
1.Reasonable costs of overall HOME-ARP program management, coordination, monitoring,
and evaluation. Such HOME-ARP costs include, but are not limited to, necessary
expenditures for the following:
a.Salaries, wages, and related costs of the PJ’s staff. If a PJ charges costs to this category,
the PJ may either include the entire salary and related costs allocable to the HOME-ARP
program of each person whose primary responsibilities with regard to the HOME-ARP
program involves program administration assignments, or the prorated share of the
salary, wages, and related costs of each person whose job includes any program
administrative assignments. A PJ may only use one of these two methods. Program
administration includes:
i.Developing systems and schedules for complying with HOME-ARP program
requirements, including systems to prevent a duplication of benefits among
beneficiaries of HOME-ARP activities;
ii.Developing interagency agreements and agreements with entities receiving
HOME-ARP funds;
iii.Monitoring HOME-ARP activities for progress and compliance with HOME-
ARP program requirements;
iv.Preparing HOME-ARP reports and other documents related to the HOME-ARP
program for submission to HUD;
v.Coordinating the resolution of audit and monitoring findings on HOME-ARP
activities;
vi.Evaluating HOME-ARP program results against stated objectives in the HOME-
ARP allocation plan, and
vii.Managing or supervising persons whose primary responsibilities with regard to
the HOME-ARP program include such assignments as those described above.
b.Travel costs incurred for official business in carrying out the HOME-ARP program.
c.Administrative services performed under third party contracts or agreements, including
such services as general legal services, accounting services, and audit services.
d.Other costs for goods and services required for administering the HOME-ARP program,
such as: rental or purchase of equipment, insurance, information systems necessary to
track and implement beneficiaries of HOME-ARP activities in accordance with the
requirements of this Notice, utilities, office supplies, and rental and maintenance (but
not purchase) of office space.
e.Costs of administering HOME-ARP TBRA and HOME-ARP supportive services
programs.
2.Staff and overhead costs of the PJ directly related to carrying out a HOME-ARP project, in
accordance with 24 CFR 92.207(b).
3.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-ARP funds.
4.Activities to affirmatively further fair housing (AFFH) in accordance with 24 CFR 5.151
and the PJ’s certification as required under this Notice and 24 CFR 5.152. The AFFH
definition in HUD’s Interim Final Rule entitled, “Restoring Affirmatively Furthering Fair
Housing Definitions and Certifications” (86 FR 30779, June 10, 2021), as amended, at 24
CFR 5.151, and the AFFH certification requirement, at 24 CFR 5.152, available at
https://www.federalregister.gov/documents/2021/06/10/2021-12114/restoring-affirmatively-
furthering-fair-housing-definitions-and-certifications.
5.Indirect costs may be charged to the HOME-ARP program under a cost allocation plan
prepared in accordance with 2 CFR part 200, subpart E, as amended.
6.Preparation of the HOME-ARP allocation plan as required in this Notice. Preparation
includes the costs of public hearing, consultations, and publications.
7.Costs of complying with the applicable Federal requirements in 24 CFR part 92, subpart H.
Project-specific environmental review costs may be charged as administrative or project
costs in accordance with 24 CFR 92.206(d)(8) and is at the discretion of the PJ.
Funds available under the HOME-ARP appropriation for administration and planning may not
be used to pay costs attributable to the regular HOME Program.
PJs may provide all or a portion of its HOME-ARP administrative funds to subrecipients and
contractors that are administering activities on behalf of the PJ (e.g., CoC entity, other non-
Federal entity), in accordance with the requirements in this Notice. However, from the
obligation date of the HOME-ARP funds in the HOME-ARP Grant Agreement and prior to
HUD’s acceptance of the PJ’s HOME-ARP allocation plan, a subrecipient or contractor to the
PJ may only incur and expend HOME-ARP funds for eligible administrative and planning costs
if the subrecipient or contractor is responsible for the use of the PJ’s entire HOME-ARP award
and has executed a HOME-ARP written agreement that complies with 24 CFR 92.504 and this
Notice. The PJ must also identify the subrecipient or contractor administering the PJ’s entire
HOME-ARP award and describe the subrecipient or contractor’s responsibilities in the PJ’s
HOME-ARP allocation plan.
All costs must comply with the Cost Principles contained in subpart E of the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2
CFR part 200, as amended (Uniform Administrative Requirements).
Once HUD obligates the HOME-ARP funds, as described in Section VIII.C.2 of this Notice, the
PJ may incur and expend up to 5 percent of its HOME-ARP allocation on eligible
administrative and planning costs, as described in this section and 24 CFR 92.207. Before
HUD’s acceptance of the PJ’s HOME-ARP allocation plan, the PJ is only permitted to incur and
expend HOME-ARP funds on eligible administrative and planning costs.
If the PJ does not submit a HOME-ARP allocation plan or if the PJ’s plan is not accepted within
a reasonable period of time, as determined by HUD, all HOME-ARP administrative and
planning costs incurred by the PJ will be ineligible costs and any HOME-ARP funds expended
by the PJ must be repaid to the PJ’s HOME Investment Trust Fund Treasury account, in
accordance with guidance issued by HUD. Moreover, if the PJ’s HOME-ARP allocation plan
does not identify or include a description of the responsibilities of the subrecipient or contractor
that is responsible for the PJ’s entire HOME-ARP award, if applicable, the administrative and
planning costs incurred or expended by the subrecipient or contractor will also be ineligible and
any HOME-ARP funds expended by the PJ’s subrecipient or contractor must be repaid to the
PJ’s HOME Investment Trust Fund Treasury account, in accordance with guidance from HUD.
B. HOME-ARP Rental Housing
HOME-ARP funds may be used to acquire, rehabilitate, or construct affordable rental housing
primarily for occupancy by households of individuals and families that meet the definition of
one or more of the qualifying populations described in Section IV.A of this Notice (“qualifying
households”). Unlike the regular HOME Program, which targets HOME-assisted rental units
based on tenant income, 70 percent of all HOME-ARP units will admit households based only
upon their status as qualifying households. This complicates the underwriting and operation of
projects that include HOME-ARP units. As a result, the requirements for HOME-ARP rental
housing provide significant flexibilities to enable HOME-ARP rental projects to remain
financially viable and affordable for the qualifying populations throughout the minimum
compliance period.
Eligible HOME-ARP rental housing includes “housing” as defined at 24 CFR 92.2, including
but not limited to manufactured housing, single room occupancy (SRO) units, and permanent
supportive housing. Emergency shelters, hotels, and motels (including those currently operating
as non-congregate shelter), facilities such as nursing homes, residential treatment facilities,
correctional facilities, halfway houses, and housing for students or dormitories do not constitute
housing in the HOME-ARP program. However, HOME-ARP funds may be used to acquire and
rehabilitate such structures into HOME-ARP rental housing.
Developing financially feasible rental housing for qualifying households is challenging in the
absence of project-based rental assistance. Most HOME-assisted rental projects rely on tenant
rents to cover all or a portion of the debt service and project operating costs. Most HOME-ARP
qualifying households will be unable to pay a rent that covers allocated debt service or
operating costs, requiring PJs to use other techniques to determine that HOME-ARP units are
affordable and that projects containing HOME-ARP units are sustainable throughout the
minimum compliance period. PJs are encouraged to work with local PHAs and other state or
local agencies to obtain project-based rental assistance for units funded with HOME-ARP. In
the absence of such project-based rental assistance, the HOME-ARP units for qualifying
households may require substantial capital investment through HOME-ARP and other Federal,
state, local, or private sources to eliminate debt service on the units. ARP suspended the
maximum per-unit subsidy limit for HOME-ARP units, enabling HOME-ARP funds to pay the
entire cost to acquire, rehabilitate and/or construct the HOME-ARP rental units, eliminating the
need for the HOME-ARP units to support debt. In mixed-income developments, revenue from
market rate or higher income-restricted units may also provide an internal subsidy to cover a
portion of the operating costs of HOME-ARP units.
To address these challenges and maintain affordability, HUD is using its HOME-ARP statutory
authority to:
Establish alternative rent requirements to 24 CFR 92.252(b) and extend an owner’s
ability to charge the maximum rent permissible under a rental assistance program (to
units occupied by recipients of tenant-based rental assistance (e.g., Housing Choice
Vouchers, HOME TBRA, HOME-ARP TBRA).
Establish a minimum compliance period of 15 years for all HOME-ARP rental units
irrespective of the amount of subsidy per unit or whether the units are acquired,
rehabilitated, and/or newly constructed.
Permit the use of HOME-ARP funds to provide ongoing operating cost assistance or
capitalize a project operating cost assistance reserve to address operating deficits of the
HOME-ARP units restricted for qualifying households during the compliance period.
Allow not more than 30 percent of the total number of rental units assisted with HOME-
ARP funds by the PJ to be restricted to households that are low-income as defined in 24
CFR 92.2 (“low-income households”). These units may only be located in projects
containing HOME-ARP units restricted for qualifying households. The HOME-ARP
rental units occupied by low-income households must operate under the regulations
applicable to HOME rental units at 24 CFR 92.252 (i.e., be occupied by low-income
households and bearing a rent not greater than the lesser of a. the Fair Market Rent for
existing housing for comparable units in the area, as established by HUD, or b. a rent
equal to 30 percent of the adjusted income of a family with annual income at 65 percent
of median income for the area, as determined by HUD, with adjustments for the number
of bedrooms in the unit).
1.Targeting and Occupancy Requirements: ARP requires HOME-ARP activities to
primarily benefit households in the qualifying populations. To improve the feasibility and
maintain the long-term viability of projects with HOME-ARP rental units for qualifying
households, a PJ may invest HOME-ARP funds in units that are not restricted for occupancy
solely for qualifying populations as described in this section. Specifically, participating
jurisdictions must comply with the following requirements:
a.Targeting: HOME-ARP funds can only be invested in units restricted for qualifying
households or low-income households as follows:
i.Not less than 70 percent of the total number of rental units assisted with HOME-
ARP funds by the PJ must be restricted for occupancy by households that are
qualifying households at the time of the household’s initial occupancy; and,
ii.Not more than 30 percent of the total number of rental units assisted with HOME-
ARP funds by the PJ may be restricted to low-income households. These rental
units do not have to be restricted for occupancy by qualifying households, however
rental units restricted to low-income households are only permitted in projects that
include HOME-ARP units for qualifying households.
b.Occupancy Requirements:
i.Qualifying Households. Units restricted for occupancy by qualifying households
must be occupied by households that meet the definition of a qualifying population
at the time of admission to the HOME-ARP unit. A qualifying household after
admission retains its eligibility to occupy a HOME-ARP rental unit restricted for
qualifying populations, irrespective of the qualifying household’s changes in income
or whether the household continues to meet the definition of a qualifying population.
As such, a unit restricted for a qualifying household remains in compliance with the
HOME-ARP unit restriction as long as the unit is occupied by a qualifying
household that met the definition of a qualifying population at the time of admission.
ii.Low-Income Households. At initial occupancy, units restricted for low-income
households must be occupied by households that meet the definition of low-income
in 24 CFR 92.2. If a tenant’s income increases above the applicable low-income
limit during the compliance period, the unit will be considered temporarily out of
compliance. Noncompliance requires the PJ to take action in accordance with the
rent and unit mix requirements in Sections VI.B.15 and VI.B.17 of this Notice,
respectively.
2.Eligible Activities: A PJ may use HOME-ARP funds for acquisition, construction, and
rehabilitation, including reconstruction as defined in 24 CFR 92.2, of affordable rental
housing for qualifying and low-income households. Acquisition of vacant land or
demolition must be undertaken only with respect to a particular housing project intended to
provide HOME-ARP rental housing within the timeframes provided in Section VI.B. of this
Notice. A HOME-ARP rental project must meet the definition of project in 24 CFR 92.2.
HOME-ARP funds may be used to assist one or more units in a project. Only the eligible
development costs of the HOME-ARP units may be charged to the HOME-ARP program.
Cost allocation in accordance with 24 CFR 92.205(d)(1) is required if the assisted and non-
assisted units are not comparable. After project completion, the number of HOME-ARP
units in a project cannot be reduced. During the HOME-ARP minimum compliance period
and prior to the end of the HOME-ARP budget period, a PJ may invest additional HOME-
ARP funds to provide operating cost assistance but is prohibited from investing additional
HOME-ARP funds for capital costs except within the 12 months after project completion.
A qualifying household admitted to a HOME-ARP rental unit may still receive HOME-ARP
supportive services or TBRA in accordance with the requirements in this Notice.
3.Forms of Assistance: The PJ may invest HOME-ARP funds in accordance with the
eligible forms of assistance described in 24 CFR 92.205(b). Each PJ has the right to
establish the terms of assistance, subject to the HOME-ARP requirements described in this
Notice.
4.Minimum Amount of Assistance: The minimum amount of HOME-ARP funds that must
be invested in a rental housing project is $1,000 times the number of HOME-ARP-assisted
units in the project as established in 24 CFR 92.205(c).
5.Eligible Costs: HOME-ARP funds may be used to pay for up to 100% of the following
eligible costs associated with the acquisition, development, and operation of HOME-ARP
rental units:
a.Development hard costs – defined in 24 CFR 92.206(a).
b.Refinancing – the cost to refinance existing debt secured by a rental project that is being
rehabilitated with HOME-ARP funds in accordance with 24 CFR 92.206(b)(2) and the
PJ’s HOME-ARP refinancing guidelines, as stated in their HOME-ARP Allocation Plan.
c.Acquisition – the costs of acquiring improved or unimproved real property.
d.Related soft costs – defined in 24 CFR 92.206(d).
e.Relocation costs – as defined in 24 CFR 92.206(f), 24 CFR 92.353, and described in this
Notice.
f.Costs relating to payment of loans – If the HOME-ARP funds are not used to directly
pay a cost specified in this HOME-ARP rental housing 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 HOME-ARP rental housing section, and (2) the HOME-ARP
funds are part of the original financing for the project and the project meets the
requirements of this Notice.
g.Operating Cost Assistance – A PJ may pay ongoing operating cost assistance or
capitalize an operating cost assistance reserve for HOME-ARP-assisted units restricted
for occupancy by qualifying populations in a project where the PJ determines in its
underwriting that the reserve is necessary to maintain the HOME-ARP units’ long-term
operational feasibility. However, HOME-ARP funds cannot be used for both a
capitalized operating cost assistance reserve and ongoing payments for operating cost
assistance during the minimum compliance period. The allowable amount of the reserve
shall not exceed the amount determined by the PJ to be necessary to provide operating
cost assistance for HOME-ARP units restricted for occupancy by qualifying populations
for the 15-year HOME-ARP minimum compliance period.
The operating cost assistance reserve for HOME-ARP units for qualifying households
must be held by the project owner in a separate interest-bearing account and sized, based
on an analysis of projected deficits remaining after the expected payments toward rent
by qualifying households are applied to the units’ share of operating costs. Funds in a
capitalized operating cost assistance reserve can only be drawn to address operating
deficits associated with HOME-ARP units restricted for occupancy by the qualifying
populations. A PJ must use the definition of operating costs in this Notice in its
calculation of operating deficits to determine the amount of HOME-ARP funds needed
for an operating cost assistance reserve or when providing operating cost assistance.
Unexpended operating cost assistance reserve amounts remaining at the end of the
minimum compliance period must be returned in accordance with Section VI.B.24 of
this Notice.
A PJ may provide operating cost assistance to a HOME-ARP rental project to cover an
operating deficit associated with HOME-ARP units restricted for occupancy by
qualifying households except for when an operating cost assistance reserve is already
established for the project. Operating cost assistance committed to a project cannot be
provided beyond the HOME-ARP budget period, as described in Section VIII.C.4 of this
Notice.
Operating costs include costs for administrative expenses, property management fees,
insurance, utilities, property taxes, and maintenance of a unit that is designated as a
HOME-ARP-assisted unit and required to be occupied by a qualifying household. .
Operating costs must be reasonable and appropriate for the area, size, population(s)
served, and type of project.
Project administrative expenses include payroll costs, which are gross salaries and
wages paid to employees assigned to the property, including payroll taxes, employee
compensation, and employee benefits; employee education, training, and travel;
advertising; and general administrative costs which are costs for goods and services
required for administration of the housing, including rental or purchase of equipment,
supplies, legal charges, bank charges, utilities, telephone/internet services, insurance,
and other administrative costs that are reasonable and customary for the general
administration of a rental unit occupied by qualifying populations. HOME-ARP permits
the pro-rated staffing costs of a Resident Services Coordinator to be included in the
operating costs allocated to a HOME-ARP unit for low-income or qualifying households
if such costs are not already paid by another source. Typically, the role of a Resident
Services Coordinator is to arrange community activities for residents and link residents
to outside service agencies as needed.
A property management fee includes the total fee paid to a management agent by the
owner for the day-to-day management of a HOME-ARP rental unit restricted for
occupancy by qualifying populations. A management agent must cover its costs of
supervising and overseeing operations of a HOME-ARP unit out of the fee they receive.
A reserve for replacement must be based on the useful life of each major system and
expected replacement cost in a HOME-ARP project. Scheduled payments to a reserve
for replacement of major systems included in the operating costs allocated to a HOME-
ARP unit restricted for a qualifying household may be made from the operating cost
assistance reserve. A reserve for replacement allocated to the HOME-ARP units may
also be capitalized in the initial year of the minimum compliance period of the HOME-
ARP units. HOME-ARP funds cannot be used to both capitalize a reserve for
replacement and provide payments to the reserve for replacement from a capitalized
operating reserve during the minimum compliance period.
Supportive services costs are not eligible operating costs of HOME-ARP units, however,
qualifying households occupying HOME-ARP rental units may receive supportive
services through the HOME-ARP supportive services eligible activity.
6.Prohibited Activities and Fees: HOME-ARP may not be used for any of the prohibited
activities, costs or fees in 24 CFR 92.214, as revised by the Appendix to this Notice.
7.HOME-ARP Funds and Public Housing: HOME-ARP funds must be used in accordance
with the requirements in 24 CFR 92.213(a)-(c).
8.Commitment: The affordable housing requirements in the definition of Commitment in 24
CFR 92.2, including the provisions in (2) Commit to a specific local project, apply to rental
housing units assisted with HOME-ARP funds. This includes but is not limited to the
requirements that the PJ and project owner have an executed legally binding written
agreement under which HOME-ARP assistance will be provided to the owner for an
identifiable project for which all necessary financing has been secured, a budget and
schedule have been established, and underwriting has been completed and under which
construction is scheduled to start within 12 months of the agreement date.
9.Maximum Per-Unit Subsidy and Limitations on Costs: The maximum per-unit subsidy
established in NAHA does not apply to HOME-ARP units. PJs may pay up to 100 percent
of the eligible and reasonable HOME-ARP costs allocated to a HOME-ARP unit, including
operating cost assistance associated with units restricted for occupancy by qualifying
households. All costs paid by HOME-ARP funds must comply with the requirements of
this Notice and the Cost Principles at 2 CFR part 200, subpart E of the Uniform
Administrative Requirements, as amended.
10.Underwriting, Subsidy Layering: Before the PJ can commit HOME-ARP funds to a
project, it must evaluate the project to determine the amount of HOME-ARP capital subsidy
and operating cost assistance necessary to provide quality affordable housing that meets the
requirements of this Notice and is financially viable throughout the minimum 15-year
HOME-ARP compliance period. The PJ must evaluate the project in accordance with
underwriting and subsidy layering guidelines it has developed for HOME-ARP projects.
The PJ’s project underwriting must include an in-depth review of underlying project
assumptions, development sources and uses, and projected operating income and expenses,
and the project’s long-term financial viability to determine the project’s need for HOME-
ARP assistance while preventing over-subsidization of the project. HUD anticipates that
project developers will rely on Low-Income Housing Tax Credit (LIHTC) financing,
HOME funds, Housing Trust Fund grants, project-based vouchers, project-based rental
assistance, operating cost reserves, state or local sources, or a combination of these and
other resources to create a feasible HOME-ARP project and maintain compliance with
HOME-ARP requirements. HOME-ARP units for qualifying households that do not receive
a commitment of project-based vouchers or project-based rental assistance may require both
deep capital subsidy and operating cost assistance to remain financially sustainable for the
minimum 15-year HOME-ARP compliance period. However, the PJ, through its
underwriting, must also determine that the HOME-ARP capital and operating subsidies do
not result in over-subsidization of the project.
To secure HOME-ARP rental units for qualifying households, HOME-ARP funds may be
invested in different types of projects, including permanent supportive housing, mixed-
finance affordable housing, and market-rate projects. While the viability of the HOME-
ARP units is the PJ’s primary concern, it must not limit its underwriting analysis to the
HOME-ARP units. The long-term viability of HOME-ARP units is contingent upon the
financial health of the entire project. PJs must therefore take a holistic approach to
underwriting that examines the overall feasibility of the entire project to determine that the
property will be financially sustainable for the duration of the 15-year HOME-ARP
compliance period.
For projects that will receive operating cost assistance through a capitalized operating cost
assistance reserve or on-going operating cost assistance for a specific period, the on-going
operating cost assistance or operating cost assistance reserve must be included in the
underwriting. Unless placed into an operating cost assistance reserve, operating cost
assistance committed to a project for a specific period cannot be provided beyond the budget
period, as described in Section VIII.C.4. of this Notice. HOME-ARP units that have
commitments for a form of project-based rental assistance must be underwritten with the
projected rental assistance and not with operating cost assistance. An operating cost
assistance reserve must be sized based on an analysis of projected operating deficits
remaining after the expected payments toward rent by qualifying households are applied to
the HOME-ARP unit's share of operating costs. While a PJ may offer on-going project
operating cost assistance instead of providing an operating cost assistance reserve, it may
find this approach makes it more difficult to develop HOME-ARP units.
a.Underwriting and Subsidy Layering Guidelines: PJs must develop standardized
underwriting guidelines for HOME-ARP rental projects. These guidelines must provide
for underwriting that accommodates and is appropriate for different types of projects.
For example, a standard market analysis does not provide the necessary data for a
project where 100% of the units are restricted as permanent supportive housing for
qualifying populations. In contrast, if a mixed-income property relies on rental income
from market-rate units to subsidize the operating costs of permanent supportive housing
units for which little or no tenant-paid rental income is projected, then a market study
confirming that the proposed market rents are achievable is needed to demonstrate the
long-term financial viability of the project.
PJs with existing HOME rental underwriting standards may use these standards as the
foundation for their HOME-ARP underwriting guidelines, but all PJs are required to
develop and implement standardized underwriting guidelines for HOME-ARP that
require the following:
i.An examination of the sources and uses of funds for the project and a determination
that costs are necessary and reasonable. In examining a project’s proposed sources
and uses, a PJ must determine the amount of HOME-ARP development subsidy
required to fill the gap between other committed funding sources and the cost to
develop the project.
A developer fee is a permitted development cost under the HOME-ARP program,
but the PJ must review the fee and determine that it is reasonable. A PJ may set
limits on the developer fee and other fees (e.g., asset management fee, property
management fee) to be paid by HOME-ARP funds that differ from other funding
sources (e.g., LIHTC underwriting standards).
ii.An assessment of the current market demand for the proposed project.
(1)For HOME-ARP units for qualifying households, a market assessment is not
required. Rather, the PJ can demonstrate that there is unmet need among
qualifying populations for the type of housing proposed through their gap
analysis, CoC data, public housing and affordable housing waiting lists, point-
in-time surveys, housing inventory count, or other relevant data on the need for
permanent housing for the qualifying populations.
(2)For projects containing units restricted for occupancy by low-income
households or market-rate households, the PJ must conduct a market
assessment in accordance with 24 CFR 92.250(b)(2). A third-party market
assessment completed by the developer or another funder meets this
requirement, but the PJ must review the assessment and provide a written,
dated acknowledgement that it accepts the assessment’s findings and
conclusions. The market assessment and the PJ’s written, dated
acknowledgement must be retained for recordkeeping purposes.
iii.Review of and determination that the developer’s experience and financial capacity
are satisfactory based on the size and complexity of the project. When assessing the
developer, the PJ must review, at minimum, prior experience with similar projects
and the current capacity to develop the proposed project. When determining
whether the developer has the financial capacity to undertake the project, the PJ
should examine financial statements and audits to determine the developer’s net
worth, portfolio risk, pre-development funding, and liquidity.
iv.Firm written financial commitments for the project.
v.A careful review of the project’s operating budget, including the basis for
assumptions, projections of a project’s net operating income, and reasonably
expected changes in revenue and expenses during the minimum compliance period,
to determine if any HOME-ARP-funded operating cost assistance is necessary and if
applicable, an operating cost assistance reserve is sized appropriately. Operating
income of the project must be sufficient to cover operating expenses throughout the
minimum compliance period. For HOME-ARP units for qualifying households, the
proforma or budget projections should include any anticipated ongoing operating
cost assistance or draws from an operating cost assistance reserve, if applicable, that
will offset operating deficits associated with those units to demonstrate sufficient
operating support.
(1)If project-based vouchers or project-based rental assistance is or will be
awarded, this analysis must include that rental assistance revenue because
operating cost assistance cannot be used for units for qualifying households with
project-based vouchers or project-based rental assistance.
(2)A PJ’s underwriting standards may permit projects to generate reasonable net
operating income throughout the minimum compliance period. However,
HOME-ARP operating cost assistance may only be used to offset operating
deficits, in accordance with the requirements of this Notice. Net operating
income resulting from HOME-ARP operating cost assistance is not permitted
and must be prohibited in the written agreement between the participating
jurisdiction and the owner.
vi.An assessment of the project’s overall viability through the minimum compliance
period based on the households (i.e., qualifying households, low-income households,
market-rate households) it will serve.
11.Property Standards: HOME-ARP rental units must comply with all property standards
applicable to rental projects required in 24 CFR 92.251 paragraphs (a) new construction, (b)
rehabilitation projects, (c)(1) and (2) acquisition of standard housing, (e) manufactured
housing, and (f) on-going property condition standards.
12.Determining Household Income: The PJ must require all HOME-ARP units to be
restricted for eligible households (i.e., either qualifying or low-income households)
throughout the minimum compliance period. Qualifying households are eligible for
admission to HOME-ARP rental units solely by meeting the definition of one of the
qualifying populations (i.e., HOME-ARP does not impose income restrictions on units
restricted for qualifying populations). If there is no income requirement in the qualifying
population’s definition, a PJ is not required to perform an initial determination of household
income except as necessary to determine an affordable rental contribution by the qualifying
household or to establish eligibility for another funding source in the unit that imposes
income restrictions (e.g., LIHTC). Each subsequent year during the compliance period,
starting 1 year after initial occupancy, the PJ must use the definition of annual income as
defined in 24 CFR 5.609 to examine the income of qualifying households to determine the
household’s contribution to rent. For low-income households, the PJ must use the definition
of annual income as defined in 24 CFR 5.609 to examine the household’s income at initial
occupancy and each subsequent year during the compliance period to determine the
household’s ongoing income eligibility and applicable rental contribution.
a.Qualifying populations: For purposes of establishing the qualifying household’s rental
contribution after initial occupancy, a PJ must examine a HOME-ARP qualifying
household’s income using 24 CFR 92.203(a)(1)(i) or (iii), starting 1 year after initial
occupancy. Each year during the minimum compliance period, the owner must examine
the household’s annual income in accordance with any one of the options in 24 CFR
92.203(a)(1) specified by the PJ. A project owner who re-examines household income
through a statement and certification in accordance with 24 CFR 92.203(a)(1)(ii), must
examine the income of each household, in accordance with 24 CFR 92.203(a)(1)(i),
every sixth year of the compliance period. Otherwise, an owner who accepts the
household’s statement and certification in accordance with 24 CFR 92.203(a)(1)(ii) is
not required to examine the household’s income unless there is evidence that the
household’s written statement failed to completely and accurately state information
about the household’s size or income.
b.Low-income Households: In accordance with 24 CFR 92.252(h), the income of each
low-income household must be determined initially in accordance with 24 CFR
92.203(a)(1)(i), and each year following the initial determination during the minimum
compliance period in accordance with any one of the options in 24 CFR 92.203(a)(1)
specified by the PJ. An owner who re-examines household income through a statement
and certification in accordance with 24 CFR 92.203(a)(1)(ii), must examine the income
of each household, in accordance with 24 CFR 92.203(a)(1)(i), every sixth year of the
minimum compliance period. Otherwise, an owner who accepts the household’s
statement and certification in accordance with 24 CFR 92.203(a)(1)(ii) is not required to
examine the household’s income unless there is evidence that the household’s written
statement failed to completely and accurately state information about the household’s
size or income.
c.Households Assisted by Other Programs: Notwithstanding paragraphs (a) and (b), if a
family is applying for or living in a HOME-ARP-assisted rental unit, and the unit is
assisted by a Federal or State project based rental subsidy then a PJ must accept a public
housing agency, section 8 project owner, or CoC recipient or subrecipient’s
determination of the family’s annual income and adjusted income under that program’s
rules and does not need to obtain source documentation in accordance with 24 CFR
92.203(a)(1) or calculate the annual income of the family. If a family is applying for or
living in a HOME-ARP rental unit, and the family is assisted by a Federal tenant-based
rental assistance program (e.g. housing choice vouchers) then a PJ may choose to accept
the rental assistance provider’s determination of the family’s annual and adjusted
income under that program’s rules without need for review under 24 CFR 92.203(a)(1).
13.Rent limitations: This Notice establishes rent limits for HOME-ARP units restricted for
qualifying populations and for units that may be restricted for low-income households.
a.Units Restricted for Occupancy by Qualifying Households: In no case can the HOME-
ARP rents exceed 30% of the adjusted income of a household whose annual income is
equal to or less than 50% of the median income for the area, as determined by HUD,
with adjustments for number of bedrooms in the unit. HUD will publish the HOME-
ARP rent limits on an annual basis.
Notwithstanding the foregoing, a unit that receives a Federal or state project-based rental
subsidy and is occupied by a qualifying household that pays as a contribution to rent no
more than 30 percent of the household’s adjusted income, may charge the rent allowable
under the Federal or state project-based rental subsidy program (i.e., the tenant rental
contribution plus the rental subsidy allowable under that program). If a household
receives tenant-based rental assistance, the rent is the rent permissible under the
applicable rental assistance program (i.e., the tenant rental contribution plus the rental
subsidy allowable under that rental assistance program).
The rent limits for HOME-ARP units for qualifying households include the rent plus the
utility allowance established pursuant to Section VI.B.13.d of this Notice.
b.Rent limitations – low-income households: HOME-ARP rental units occupied by low-
income households must comply with the rent limitations in 24 CFR 92.252(a) (i.e., the
lesser of the Fair Market Rent for existing housing for comparable units in the area, as
established by HUD, or a rent equal to 30 percent of the income of a family at 65
percent of median income for the area, as determined by HUD, with adjustments for
number of bedrooms in the unit). Notwithstanding the foregoing, when a household
receives a form of Federal tenant-based rental assistance (e.g., housing choice vouchers),
the rent is the rent permissible under the applicable rental assistance program (i.e., the
tenant rental contribution plus the rent subsidy allowable under the rental assistance
program). The rent limits for low-income households apply to the rent plus the utility
allowance established pursuant to Section VI.B.13.d of this Notice.
c.Rent limitations – Single Room Occupancy (SRO) Units: A HOME-ARP rental project
may consist of SRO units. For the purposes of HOME-ARP rental, a SRO unit is
defined as a unit that is the primary residence of the occupant(s) and must at least
contain sanitary facilities but may also contain food preparation facilities. A project’s
designation as a SRO cannot be inconsistent with the building’s zoning and building
code classification.
If the SRO units have both sanitary and food preparation facilities, the maximum
HOME-ARP rent is based on the zero-bedroom fair market rent. If the SRO unit has
only sanitary facilities, the maximum HOME-ARP rent is based on 75 percent of the
zero-bedroom fair market rent. The rent limits for SRO units must also include the
utility allowance established pursuant to Section VI.B.13.d of this Notice.
d.Initial Rent Schedule and Utility Allowance: The PJ must establish maximum
allowances for utilities and services and update the allowances annually. The PJ may
adopt the utility allowance schedule of the PHA.
The PJ must review and approve the HOME-ARP rents proposed by the owner, subject
to the HOME-ARP rent limitations. For HOME-ARP units where the tenant is paying
utilities and services (e.g., trash collection), the PJ must determine that the rent for the
unit does not exceed the maximum rent minus the monthly allowance for utilities and
services.
14.Tenant Contribution to Rent – Qualifying Households: The PJ must determine that the
qualifying household’s contribution to rent is affordable to the qualifying household based
on a determination of the household’s income. If the household is receiving project-based
or tenant-based rental assistance, the household cannot be required to contribute more
towards rent than the amount permitted by the requirements of the applicable rental
assistance program (See Section VI.B.13.a of this Notice). If a qualifying household is not
receiving project-based or tenant-based rental assistance and cannot contribute any income
toward rent, or the contribution is insufficient to cover the unit rent, the project owner may
draw from the project’s operating cost assistance reserve if projected rental revenue minus
the operating costs of the unit results in a deficit. If an operating cost assistance reserve was
not capitalized at project completion:
The PJ may provide ongoing HOME-ARP operating cost assistance to cover the
operating deficits associated with units occupied by qualifying households, subject
to the requirements in this Notice.
The qualifying household may receive HOME-ARP TBRA to remain housed in the
HOME-ARP rental unit or the PJ may offer, in conjunction with a qualifying
household’s admittance into a HOME-ARP rental unit, a simultaneous award of
supportive services to the qualifying household in accordance with Section VI.D of
this Notice. Any provision of supportive services must comply with all requirements
of Section VI.D. of the Notice and the PJ’s policies and procedures.
Operating cost assistance, HOME-ARP TBRA, and supportive services funds
committed to a project cannot be provided beyond the budget period for the HOME-
ARP funds, as described in Section VIII.C.4 of this Notice.
15.Changes in Income and Over-income Households:
A household that met the definition of one of the HOME-ARP qualifying populations at
initial occupancy and whose annual income at the time of income re-certification is above
50 percent of median income for the area but at or below 80 percent of the median income
for the area must pay the rent specified in 24 CFR 92.252(a).
HOME-ARP-assisted units restricted for low-income households continue to qualify as
HOME-ARP rental housing despite a temporary noncompliance caused by increases in the
incomes of existing households if actions satisfactory to HUD are taken so that all vacancies
are filled in accordance with HOME-ARP requirements until the noncompliance is
corrected.
A qualifying or low-income household that is not low-income at the time of income re-
certification (i.e., whose income is above 80 percent of the median income for the area)
must pay rent that complies with the over income regulatory requirements at 24 CFR
92.252(i)(2), which includes requirements applicable to HOME units that also have LIHTC
restrictions.
16.Unit Designation: The PJ must determine the number of HOME-ARP units in the project
restricted for qualifying households and low-income households, respectively, and whether
the units are fixed or floating units at the time of project commitment. The total number of
HOME-ARP rental units restricted for occupancy by qualifying households and the total
number of HOME-ARP rental units restricted for low-income households must be identified
as separate totals in the written agreement. In a project containing HOME-ARP and other
units, the PJ must designate fixed or floating HOME-ARP units in accordance with 24 CFR
92.252(j). The PJ must maintain this unit mix throughout the compliance period.
17.Maintaining Unit Mix: At the time of admission to a HOME-ARP rental unit, a household
must meet the definition for at least one qualifying population or be determined to be a low-
income household, depending on the applicable HOME-ARP restriction on the rental unit to
which it is being admitted and in accordance with the written agreement.
For HOME-ARP rental units restricted for occupancy by qualifying populations, a
household that meets the definition of a qualifying population at the time of admission
retains its eligibility to occupy a HOME-ARP rental unit restricted for occupancy by
qualifying populations, irrespective of changes in income or whether the household
continues to meet the definition of a qualifying population after initial occupancy. As an
example, a household that qualifies as “Homeless” at admission does not meet the Homeless
definition once the household occupies a HOME-ARP unit but remains a qualifying
household and is eligible to remain in a HOME-ARP rental unit restricted for qualifying
populations. Income determinations for qualifying households are therefore only for
purposes of establishing a qualifying household’s rental contribution as described in Section
VI.B.15 of this Notice and not for maintaining continued eligibility in the HOME-ARP
program. In a project with floating units, PJs are encouraged but not required to shift the
HOME-ARP qualifying population designation to another unit to serve another qualifying
household if the household’s income subsequently is certified to be at or above 80 percent
AMI and the household no longer meets the definition of any qualifying population.
For HOME-ARP rental units restricted for occupancy by low-income households, units will
be considered temporarily out of compliance if the household’s income increases above 80
percent of area median income. The requirements for correcting any noncompliance using
vacancies or redesignation of units depends on whether the HOME-ARP rental units are
fixed or floating and whether other funding sources (e.g., LIHTC) impose income or other
restrictions on the units. Please note, in accordance with the requirements in 24 CFR 92.253
and in Section VI.B.19.c, an increase in a tenant’s income does not constitute good cause to
evict or refuse to renew a tenant’s lease, regardless of program requirements associated with
other funding sources such as LIHTC. In addition, compliance with unit restrictions for
low-income households requires adjustment of rents as described in Section VI.B.15 of this
Notice.
18.Minimum Compliance Period: HOME-ARP-assisted units must comply with the
requirements of this Notice for a minimum period of 15 years, irrespective of the amount of
HOME-ARP funds invested in the project or the activity being undertaken. A PJ may
impose a longer compliance period but should plan for the project’s financial feasibility for
the longer period without HOME-ARP funds. The PJ may not use HOME-ARP funds to
provide operating cost assistance, including a capitalized operating cost assistance reserve,
to cover deficits during a PJ’s extended compliance period.
If a project-based rental assistance Housing Assistance Payments (HAP) contract is awarded
to a HOME-ARP rental project, a PJ must impose a minimum compliance period that is the
greater of 15 years or the term of the HAP contract. PJs are also encouraged to extend
restrictions for occupancy of the HOME-ARP units in accordance with the requirements in
this section to match the term of eligible HAP contract renewals.
The provisions at 24 CFR 92.252(e)(1)-(4) apply, including the requirement that the PJ must
impose the HOME-ARP rental requirements through a deed restriction, covenant running
with the land, legally binding agreement restricting the use of the property and recorded on
the property in accordance with State recordation laws, or other mechanisms approved by
HUD. The chart providing minimum affordability periods based on rental housing activity
that is contained in 24 CFR 92.252(e) does not apply. The enforceable restriction must
provide that units assisted with HOME-ARP comply with the requirements of this Notice
throughout the minimum 15-year compliance period, including:
a.Units restricted for qualifying populations must be occupied by households that met the
definition of a qualifying population at the time of initial occupancy. The household’s
contribution toward rent during this period must be affordable in accordance with
Section VI.B.14 of this Notice. The rents for these units must comply with the rent
limitations established in this Notice, including the rent provisions specified in 24 CFR
92.252(i)(2) for households whose income increases above 80 percent of area median
income and whose contribution to rent complies with the requirements in Section
VI.B.15.
b.Units available for low-income households must be continuously occupied by
households who are income eligible. The rents for these units must comply with the rent
limitations established in this Notice, including the rent provisions specified in 24 CFR
92.252(i)(2) for households whose income increases above 80 percent of area median
income.
c.The units must comply with the ongoing property condition standards of 24 CFR
92.251(f) throughout the compliance period as demonstrated by an on-site inspection
within 12 months of project completion and an on-site inspection at least once every
three years thereafter as required by 24 CFR 92.504.
d.Each household that occupies a HOME-ARP unit has an executed lease that complies
with the tenant protections required in Section VI.B.19 of this Notice.
19.Tenant Protections: PJs must verify that each household that occupies a HOME-ARP
assisted unit has an executed lease that complies with the tenant protection requirements of
this Notice. The lease must be either be between the project owner and the household or
between the project owner and a HOME-ARP sponsor with a sublease between the
qualifying household and HOME-ARP sponsor. A HOME-ARP sponsor is a nonprofit
organization that provides housing or supportive services to qualifying households and
facilitates the leasing of a HOME-ARP rental unit to a qualifying household or the use and
maintenance of HOME-ARP TBRA by a qualifying household. PJs may permit a HOME-
ARP sponsor to lease a HOME-ARP unit from an owner or execute a master lease with the
owner of a HOME-ARP project for HOME-ARP units restricted for occupancy by
qualifying households. The HOME-ARP sponsor may then sublease the HOME-ARP rental
unit to the qualifying household. The sublease between the HOME-ARP sponsor and the
qualifying household must comply with the rent limitations and tenant protection
requirements of this Notice.
a.Lease Requirement: There must be a lease between the qualifying household or the low-
income household and the owner of the HOME-ARP-assisted project in accordance with
24 CFR 92.253(a), except that a sublease is permitted if a HOME-ARP sponsor has
executed a master lease or lease with the project owner for the leasing of the units
restricted for occupancy by qualifying households.
b.Prohibited Lease Terms: The lease between the low-income household, qualifying
household, or HOME-ARP sponsor and the HOME-ARP project owner or the sublease
between the HOME-ARP sponsor and a qualifying household may not contain any of
the prohibited lease terms specified in 24 CFR 92.253(b).
c.Termination of tenancy: An owner may not terminate the tenancy or refuse to renew the
lease of a tenant of a HOME-ARP unit or of a HOME-ARP sponsor with a sublease with
a qualifying household except for serious or repeated violation of the terms and
conditions of the lease; for violation of applicable Federal, State, or local laws; or for
other good cause. Similarly, a HOME-ARP sponsor may not refuse to renew a sublease
with a qualifying household except for serious or repeated violation of the terms and
conditions of the sublease; for violation of applicable Federal, State, or local laws; or for
other good cause. An increase in the tenant’s or sublessee’s income does not constitute
good cause.
In addition, if HOME-ARP funds were or are used to capitalize an operating cost
assistance reserve or there is a current contract for the PJ to provide operating cost
assistance to the project, an owner may not terminate the tenancy or refuse to renew the
lease of a qualifying household because of the household’s inability to pay rent during
the minimum compliance period. A qualifying household’s inability to pay rent shall
mean that the qualifying household cannot pay more than 30 percent of the qualifying
household’s income toward rent, based on an income determination made by the PJ in
the last 30 days.
Where there is no capitalized operating reserve or other operating cost assistance to
cover the operating deficit for a HOME-ARP unit occupied by a qualifying household,
the PJ may assist the qualifying household with HOME-ARP TBRA or supportive
services in accordance with the requirements of this Notice.
The above tenant protections are necessary as HOME-ARP requires the PJ to perform
underwriting that reviews the operating feasibility of units occupied by qualifying
households for the 15-year compliance period to determine how HOME-ARP funds may
address the potential for qualifying households to have little to no income to contribute
toward rent.
To terminate or refuse to renew tenancy for any household occupying a HOME-ARP
unit, the owner must serve written notice upon the tenant (and the HOME-ARP sponsor
if the lease is between an owner and HOME-ARP sponsor) at least 30 days before
termination of tenancy, specifying the grounds for the action. In the case of a sublease,
to terminate or refuse to renew tenancy of a qualifying household, the HOME-ARP
sponsor, in accordance with the policy established by the PJ, must notify the PJ in
advance of serving written notice to the qualifying household and must serve written
notice upon the qualifying household at least 30 days before termination of tenancy,
specifying the grounds for the action.
20.Coordinated Entry and Project-Specific Waitlists: In accordance with Section IV.C of
this Notice, PJs must determine whether an owner may use a CoC’s CE, a CoC’s CE and
other referral sources, or a project-specific waitlist, to select qualifying households for
HOME-ARP units restricted for occupancy by qualifying populations. PJs will make this
determination on a project-by-project basis. Regardless of which method is selected, in all
cases, the PJ must use a project-specific waitlist when selecting households to occupy units
restricted for occupancy by low-income households. Any preferences among qualifying
households must be disclosed in the HOME-ARP allocation plan through the PJ’s public
participation process in accordance with Section V.C. of this Notice. The written agreement
between the PJ and the project owner must specify the method the owner must use for
selecting qualifying households for admission to HOME-ARP units.
a. The owner of a HOME-ARP rental project must adopt and follow written tenant
selection policies and criteria for HOME-ARP units that:
i.Limits eligibility to households that meet one of the HOME-ARP qualifying
populations definitions or low-income households in accordance with HOME-
ARP requirements; Preferences for households in one or more of the HOME-
ARP qualifying populations must comply with the PJ’s preferences and the PJ’s
policies and procedures for applying those preferences, if any, and must not
violate nondiscrimination requirements in 24 CFR 92.350.
ii.Do not exclude an applicant with a voucher under the section 8 Housing Choice
Voucher Program (24 CFR 982), or an applicant participating in HOME,
HOME-ARP or other Federal, state or local tenant-based rental assistance
program because of the status of the prospective tenant as a holder of such a
certificate, voucher, or comparable tenant-based assistance document;
iii.Limits eligibility or gives a preference to a particular qualifying population or
segment of the qualifying population if permitted in its written agreement with
the participating jurisdiction (and only if the limitation or preference is described
in the participating jurisdiction's HOME-ARP allocation plan). A preference for
households in one or more of the HOME-ARP qualifying populations must
comply with the PJ’s determined preference(s) and the PJ’s policies and
procedures for applying the preference(s), if any;
iv.Any limitation or preference must not violate nondiscrimination requirements in
24 CFR 92.350. If the PJ requires the use of a project-specific waitlist to select
qualifying households and/or low-income households for occupancy of HOME-
ARP units, provide for the selection of households from a written waiting list in
the chronological order of their application, insofar as is practicable;
v.Gives prompt written notification to any rejected applicant of the grounds for any
rejection; and,
vi.Complies with the VAWA requirements as described in 24 CFR 92.359.
b.Project-Specific Waitlist – Low-Income Households: A project owner must use a
project-specific waitlist to select households to occupy units restricted for occupancy
by low-income households in accordance with the tenant selection requirements of
24 CFR 92.253(d).
21.Project Completion and Occupancy: HOME-ARP rental projects must meet the
definition of project completion at 24 CFR 92.2. If the PJ fails to complete a project within
4 years of project commitment, it must comply with the terminated project requirements at
24 CFR 92.205(e)(2). If the HOME-ARP units are not occupied by eligible qualifying
households or low-income households within six months following project completion, the
PJ, as applicable, must submit to HUD information on its efforts to coordinate with a CoC,
homeless service providers, social service, and other public agencies to fill units for
qualifying households or must submit marketing information and, if appropriate, a
marketing plan to fill units for low-income households. The PJ must repay any HOME-
ARP funds invested in units that are not rented to eligible qualifying or low-income
households within 12 months of project completion.
22.Penalties for Noncompliance: The PJ must repay HOME-ARP funds invested in rental
housing that is terminated before completion or otherwise does not comply with initial or
ongoing requirements of this Notice during the compliance period, as follows:
a.If the noncompliance or termination occurs within the first 10 years of the compliance
period, the PJ must repay the entire amount of HOME-ARP funds invested in the
project.
b.If the noncompliance or termination occurs in years 11 through 15, the repayment
amount will be reduced by 20 percent for each year beyond the initial 10-years during
which time the project was compliant.
Repayment of the HOME-ARP funds is not required if the project owner sells or transfers,
either voluntarily or involuntarily, the HOME-ARP project during the compliance period if
(1) the HOME-ARP restrictions remain, (2) the project and new project owner continues to
comply with all HOME-ARP requirements, and (3) any HOME-ARP funds remaining in a
project’s operating cost assistance reserve or reserve for replacement remain with the project
and convey upon sale or transfer of the project as a restricted operating cost assistance
reserve or reserve for replacement subject to HOME-ARP Notice requirements.
23.Operating Cost Assistance Reserve - Management and Oversight: The PJ must require
that any HOME-ARP funds expended for project operating cost assistance reserves are held
by the project owner in a separate interest-bearing account. The PJ must require the project
owner to request written approval from the PJ prior to disbursing funds from the project
operating cost assistance reserve. The PJ must review each requested distribution from the
operating cost assistance reserve, including supporting documentation, to determine that the
distribution is reasonable and necessary to cover the operating deficit associated with
HOME-ARP units occupied by qualifying households. The PJ must, no less than annually,
review the operating cost assistance reserve account to determine that the account is
appropriately sized based on the projected operating deficits of HOME-ARP units restricted
for occupancy by qualifying households. The PJ may require the project owner to enter into
a deposit account control agreement for the operating cost assistance reserve where the PJ
must approve disbursements from the account.
24.End of Compliance Period and Return of Operating Cost Assistance Reserve: Any
unexpended operating cost assistance reserve remaining at the end of the compliance period
must be returned as follows:
a.If the HOME-ARP rental project will continue to operate in accordance with the
HOME-ARP requirements and serve qualifying households beyond the HOME-ARP 15-
year compliance period as demonstrated by enforceable restrictions imposed by the PJ,
the project can retain the operating cost assistance reserve amount to address any
operating deficits associated with the HOME-ARP units occupied by qualifying
households.
b.If the HOME-ARP project will not continue to operate in accordance with the HOME-
ARP requirements and serve qualifying households beyond the 15-year HOME-ARP
compliance period and the HOME-ARP grant has expired or is closed out, the remaining
operating cost assistance reserve funds must be deposited in the PJ’s local HOME
account and recorded as HOME program income receipt in the Integrated Disbursement
and Information System (IDIS) and used for eligible costs under 24 CFR part 92.
C.Tenant-Based Rental Assistance (TBRA)
HOME-ARP funds may be used to provide tenant-based rental assistance to qualifying
households (“HOME-ARP TBRA”). In HOME-ARP TBRA, the PJ assists a qualifying
household with payments to cover the entire or insufficient amounts that the qualifying
household cannot pay for housing and housing-related costs, such as rental assistance, security
deposits, and utility deposits. HOME-ARP TBRA assisted households may choose to rent a
unit in a HOME-ARP rental project or any other eligible rental unit. HOME-ARP TBRA is a
form of rental assistance that is attached to the household and not a particular rental unit.
Therefore, the HOME-ARP TBRA assisted household may choose to move to another unit with
continued HOME-ARP TBRA as long as the new unit meets the applicable property standards
of this Notice. If a HOME-ARP TBRA assisted household chooses to move, the rental
assistance contract terminates and a new rental assistance contract for the new unit will be
executed according to HOME-ARP TBRA requirements. The HOME-ARP TBRA assisted
household must notify the PJ before moving in order to receive continued HOME-ARP TBRA.
1.Tenant Selection: Only individuals and families in the qualifying populations are eligible
to receive HOME-ARP TBRA assistance. PJs must perform tenant selection in accordance
with Section IV.C of this Notice. The PJ must select qualifying households for HOME-
ARP TBRA in accordance with written tenant selection policies and criteria that are based
on local housing needs established in the HOME-ARP allocation plan. The PJ must follow
written tenant selection policies and criteria that:
a.Limit eligibility to households that meet one of the HOME-ARP qualifying populations
definitions in accordance with HOME-ARP requirements. Preferences for households
in one or more of the HOME-ARP qualifying populations, if any, must comply with the
preferences and/or method of prioritization in the PJ’s HOME-ARP allocation plan and
the PJ’s policies and procedures for applying such preferences, if any, and must not
violate nondiscrimination requirements in 24 CFR 92.350.
b.If the PJ selects HOME-ARP TBRA applicants off a waiting list, it must provide for the
selection of qualifying households from a written waiting list in accordance with the
PJ’s preferences or method of prioritization in the chronological order of their
application, insofar as is practicable.
c.Give prompt written notification to any rejected applicant of the grounds for any
rejection, and
d.Comply with the VAWA requirements as described in 24 CFR 92.359.
Finally, the PJ may offer, in conjunction with HOME-ARP TBRA assistance, a
simultaneous award of services in accordance with Section VI.D of this Notice, and also
provide particular types of other nonmandatory services that may be most appropriate for
persons with a special need or a particular disability. Any provision of supportive services
must comply with all requirements of Section VI.D of the Notice and the PJ’s policies and
procedures.
2.Tenant Protections: PJs must require and verify that there is an executed lease between the
qualifying household that receives HOME-ARP TBRA and the owner of the rental unit or
between the owner of the rental unit and a HOME-ARP sponsor with a sublease between the
qualifying households and the HOME-ARP sponsor, in accordance with 24 CFR 92.253(a).
A HOME-ARP sponsor is a nonprofit organization that provides housing or supportive
services to qualifying households and facilitates the leasing of a rental unit to a qualifying
household or the use and maintenance of HOME-ARP TBRA by a qualifying household.
PJs may permit a HOME-ARP sponsor, as defined in Section VI.B.19, to execute a lease or
master lease with a project owner. The HOME-ARP sponsor must then sublease a unit to a
qualifying household. The lease between the qualifying household and the rental unit owner
or the sublease between the HOME-ARP sponsor and the qualifying household cannot
contain any of the prohibited lease terms specified in 24 CFR 92.253(b).
3.Eligible Costs: Eligible costs under HOME-ARP TBRA include rental assistance, security
deposit payments, and utility deposit assistance to qualifying households. HOME-ARP
funds may be used to pay for up to 100% of these eligible costs. A PJ may use HOME-ARP
TBRA funds to provide loans or grants to qualifying households for security deposits for
rental units regardless of whether the PJ provides any other HOME-ARP TBRA assistance.
The amount of funds that may be provided for a security deposit may not exceed the
equivalent of two months’ rent for the unit. Utility deposit assistance is an eligible cost only
if rental assistance or a security deposit payment is provided. Costs of inspecting the
housing are also eligible as costs of HOME-ARP TBRA. Administration of HOME-ARP
TBRA is an eligible cost only if executed in accordance with general management oversight
and coordination at 24 CFR 92.207(a), except that the costs of inspecting the housing and
determining the income eligibility of the family are eligible project costs under HOME-ARP
TBRA.
4.Ineligible Costs: HOME-ARP TBRA may not be used to pay for the homebuyer program
as defined at 24 CFR 92.209(c)(2)(iv).
5.Portability of Assistance: A PJ may require the HOME-ARP TBRA assisted household to
use HOME-ARP TBRA within the PJ's boundaries or may permit the household to use the
assistance outside its boundaries pursuant to 24 CFR 92.209(d).
6.Term of Rental Assistance Contract: The requirements at 24 CFR 92.209(e) defining the
term of the rental assistance contract for providing assistance with HOME funds are waived
for HOME-ARP TBRA. The PJ must determine the maximum term of the rental assistance
contract. The rental assistance contract continues until the end of the rental assistance
contract term, as determined by the PJ, or until the lease or sublease is terminated,
whichever occurs first. The term of the rental assistance contract may be renewed, subject to
the availability of HOME-ARP funds. The term of the rental assistance contract must begin
on the first day of the term of the lease or sublease. HOME-ARP TBRA funds cannot be
used after the end of the budget period.
7.Maximum Subsidy: The PJ must establish policies for the allowable maximum subsidy,
which may differ from the maximum subsidy requirements at 24 CFR 92.209(h). PJs may
provide up to 100 percent subsidy for rent, security deposit payments, and utility bills. The
PJ must also establish policies for determining any household contribution to rent based on a
determination of the qualifying household’s income.
8.Rent Standard: Consistent with 24 CFR 92.209(h)(3), PJs must also establish a rent
standard for HOME-ARP TBRA by unit size that is based upon local market conditions or
the section 8 Housing Choice Voucher program under 24 CFR part 982. The PJ must
determine whether the rent for a HOME-ARP TBRA household complies with the rent
standard established by the PJ for the HOME-ARP program and must disapprove a lease if
the rent does not meet the PJ’s rent standard for HOME-ARP TBRA.
9.Housing Quality Standards: Housing occupied by a household receiving HOME-ARP
TBRA must comply with all housing quality standards required in 24 CFR 982.401 (or
successor inspection standards issued by HUD) unless the tenant is residing in a HOME or
HOME-ARP unit, in which case the PJ may defer to initial and ongoing inspection
standards.
10.Program Operation: The PJ may operate HOME-ARP TBRA itself or may contract with a
PHA or other entity with the capacity to operate a rental assistance program. In either case,
the PJ or entity operating the program must approve the lease. HOME-ARP TBRA may be
provided through an assistance contract with (1) an owner that leases a unit to a qualifying
household; (2) the qualifying household, or (3) an owner and the qualifying household in a
tri-party contract. In the case of HOME-ARP TBRA provided in coordination with a
HOME-ARP sponsor, as described below, the PJ may require that payments be made
directly to the HOME-ARP sponsor that will make rental payments to the owner on behalf
of the qualifying household or require payments directly to the owner of the unit.
11.HOME-ARP TBRA with a HOME-ARP Sponsor: HOME-ARP TBRA may be provided
in coordination with a HOME-ARP sponsor. As defined in Section VI.B.19, a HOME-ARP
sponsor is a nonprofit organization that provides housing or supportive services to
qualifying households and facilitates the leasing of a HOME-ARP rental unit to a qualifying
household or the use and maintenance of HOME-ARP TBRA by a qualifying household. A
HOME-ARP sponsor may make rental subsidy payments and a security deposit payment on
behalf of a qualifying household. Under HOME-ARP TBRA, a qualifying household may
reside in housing leased by a HOME-ARP sponsor if there is a sublease that complies with
HOME-ARP lease requirements between the HOME-ARP sponsor and the qualifying
household.
a.Rental Assistance Contract: There must be a rental assistance contract between the PJ
and at least one of the following:
HOME-ARP sponsor;
Qualifying household; or
Owner of the housing.
Rental subsidy payments are made on behalf of the HOME-ARP TBRA household
pursuant to a rental assistance contract. The rental assistance contract continues until the
lease is terminated or the term of the rental assistance contract expires (and is not
renewed). Regardless of the role of the HOME-ARP sponsor, the HOME-ARP TBRA
household has the right to continued HOME-ARP TBRA assistance if the household
chooses to move from the unit. HOME-ARP TBRA funds cannot be used beyond the
end of the HOME-ARP budget period.
The HOME-ARP sponsor may only receive the TBRA subsidy directly from the PJ on
behalf of the qualifying household if the rental assistance contract is between the
HOME-ARP sponsor and the PJ or the HOME-ARP sponsor and the PJ have entered
into a written agreement as outlined below. The HOME-ARP sponsor must make rental
subsidy payments to the owner on behalf of the qualifying household per the terms and
conditions of the HOME-ARP TBRA contract or written agreement with the PJ. When
the HOME-ARP TBRA assisted household moves to a new unit, the HOME-ARP
sponsor is not required to continue its sponsor relationship with the HOME-ARP TBRA
assisted household for the new rental unit but may do so with the consent of the HOME-
ARP TBRA household.
The PJ must establish policies and procedures regarding termination of HOME-ARP
TBRA assistance for qualifying households who are absent from the rental unit for a
minimum of 60 days and where a HOME-ARP sponsor is leasing the rental unit and
subleasing to the qualifying household or providing HOME-ARP TBRA rental subsidy
payments on behalf of the household.
b.Lease and Sublease: PJs must require and verify that each household that receives
HOME-ARP TBRA assistance has an executed lease that complies with the tenant
protection requirements of this Notice. The lease agreement may be between the project
owner and the HOME-ARP TBRA household, or PJs may permit a HOME-ARP
sponsor to execute a lease with an owner for an individual unit or a master lease for
more than one unit restricted for occupancy by HOME-ARP TBRA households. If the
lease agreement is between the HOME-ARP sponsor and owner, the HOME-ARP
sponsor must execute a sublease agreement with a HOME-ARP TBRA household. The
sublease between the HOME-ARP sponsor and the HOME-ARP TBRA household must
meet the tenant protection requirements of this Notice.
c.Written Agreement with HOME-ARP Sponsor: The PJ must enter into a written
agreement with the HOME-ARP sponsor if the HOME-ARP TBRA rental assistance
contract is not with the HOME-ARP sponsor and the HOME-ARP sponsor will receive
the HOME-ARP TBRA subsidy directly from the PJ. The written agreement must
specify the requirements for the HOME-ARP sponsor receiving the HOME-ARP TBRA
subsidy on behalf of the qualifying household and the HOME-ARP sponsor’s obligation
to provide the HOME-ARP TBRA payment to the owner for the unit’s required rent.
12.Project Completion: Project completion for a HOME-ARP TBRA project means the final
drawdown has been disbursed for the project.
D.Supportive Services
HOME-ARP funds may be used to provide a broad range of supportive services to qualifying
individuals or families as a separate activity or in combination with other HOME-ARP
activities. Supportive services include: a) services listed in section 401(29) of the McKinney-
Vento Homeless Assistance Act (“McKinney-Vento Supportive Services”)1 (42 U.S.C.
11360(29)); b) homelessness prevention services , as described in Section VI.D.3. and D.4
below; and c) housing counseling services.
1.Eligible Program Participants: Supportive services may be provided to individuals and
families who meet the definition of a qualifying population under Section IV.A of this
Notice and who are not already receiving these services through another program. Program
participants in other HOME-ARP activities are eligible for supportive services under this
Notice in accordance with policies and procedures developed by the PJ. These policies and
procedures should identify the length of time that program participants may be served by
HOME-ARP TBRA and/or HOME ARP rental housing before they will no longer be
eligible as a qualifying population for purposes of this section.
2.Client Selection: HOME-ARP funds may only be used to provide supportive services to
individuals or families that meet the definition of a qualifying population in Section IV.A of
this Notice. PJs must develop policies and procedures for the selection of program
participants for services under this section of the Notice that comply with Section IV.C and
this section of this Notice.
3.Eligible Supportive Services under HOME-ARP: There are three categories specifically
included as supportive services under HOME-ARP:
a.McKinney-Vento Supportive Services: McKinney-Vento Supportive Services under
HOME-ARP are adapted from the services listed in section 401(29) of McKinney-
Vento.
b.Homelessness Prevention Services: HOME-ARP Homelessness Prevention Services are
adapted from eligible homelessness prevention services under the regulations at 24 CFR
576.102, 24 CFR 576.103, 24 CFR 576.105, and 24 CFR 576.106, and are revised,
supplemented, and streamlined in Section VI.D.4.c.i below.
c.Housing Counseling Services: Housing counseling services under HOME-ARP are
those consistent with the definition of housing counseling and housing counseling
services defined at 24 CFR 5.100 and 5.111, respectively, except where otherwise noted.
The requirements at 24 CFR 5.111 state that any housing counseling, as defined in 24
CFR 5.100, required under or provided in connection with any program administered by
HUD shall be provided only by organizations and counselors certified by the Secretary
under 24 CFR part 214 to provide housing counseling, consistent with 12 U.S.C. 1701x.
1 The Consolidated Appropriations Act, 2021 (P.L. 116-260) enacted changes that renumbered section 401(27) to
(29) of McKinney-Vento.
HUD-approved Housing Counseling Agencies can be found on HUD’s website at:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hcc.
Program requirements and administration under 24 CFR part 214 apply to the provision of
HOME-ARP Housing Counseling supportive services except those provisions related to
current homeowners do not apply. Eligible HOME-ARP topics under Housing Counseling
include but are not limited to the following examples:
Rental Housing
Counseling Topics
(24 CFR 214.300(e)(4))
Pre-Purchase Homebuying
Topics
(24 CFR 214.300(e)(1))
Homeless Services Topics
(24 CFR 214.300(e)(5))
HUD rental and rent
subsidy programs
Advice regarding readiness
and preparation
Homeless assistance
information regarding
emergency shelter
Other federal, state, or
local assistance
Federal Housing
Administration insured
financing
Other emergency services
Fair housing Housing selection and
mobility
Transitional housing
Rental search assistance Housing search assistance Referral to local, state, and
federal resources (24 CFR
214.300(b)(2))
Landlord tenant laws Fair housing and predatory
lending
Lease terms Budgeting and credit
Rent delinquency Loan product comparison
Referrals to local, state,
and federal resources
Purchase procedures and
closing costs
Referrals to local, state, and
federal resources
Housing Counseling surrounding the following topics are ineligible under HOME-ARP:
Resolving or preventing mortgage delinquency, including, but not limited to default
and foreclosure, loss mitigation, budgeting, and credit;
Home maintenance and financial management for homeowners, including, but not
limited to: Escrow funds, budgeting, refinancing, home equity, home improvement,
utility costs, energy efficiency, rights and responsibilities of homeowners, and
reverse mortgages.
In accordance with 24 CFR 214.300(a)(2), housing counselors must establish an action plan
for each participating qualifying individual or family. Additionally, as per 24 CFR
214.300(c), housing counselors must also make reasonable efforts to have follow-up
communications with participating qualifying individuals, when possible, to assure that the
individual or family is progressing toward the housing goal established in the plan, to
modify or terminate housing counseling, and to learn and report outcomes.
4.Eligible Costs of Supportive Services for Qualifying Individuals and Families: HOME-
ARP funds may be used to pay eligible costs associated with the HOME-ARP supportive
services activity in accordance with the requirements in this Notice. Eligible costs that may
be paid using HOME-ARP funds are limited to only those identified in Section VI.D.4.c
below. Any ineligible costs paid using HOME-ARP funds must be repaid in accordance
with the requirements of this Notice.
HUD has used its discretion in ARP to include eligible costs for supportive services that are
necessary to assist the qualifying populations, prevent homelessness, or to enable qualifying
households to obtain and maintain housing. The list of eligible costs associated with
McKinney-Vento Supportive Services and Homelessness Prevention Services is in Section
VI.D.4.c.i of this Notice.
While all qualifying households are eligible to receive supportive services under this
activity, the PJ must establish requirements for documenting eligible costs for an individual
or family in a qualifying population (as defined in Section IV.A of this Notice) as
McKinney-Vento supportive services, homelessness prevention services, or Housing
Counseling.
If a person is homeless, then the person is eligible to be provided the supportive services as
McKinney-Vento supportive services for the costs allowable in Section VI.D.4.c below. If a
person is housed and the supportive services are intended to help the program participant
regain stability in the program participant’s current permanent housing or move into other
permanent housing to achieve stability in that housing then the person is eligible for
homelessness prevention services for the costs allowable in Section VI.D.4.c.i below.
Housing Counseling services may be provided regardless of whether a person is homeless or
currently housed.
PJs must document in their files which types of supportive services they wish to offer
program participants. If PJs are using a supportive services provider, PJs must document in
their written agreements with supportive service providers whether they are authorizing
McKinney-Vento supportive services, homelessness prevention services, Housing
Counseling services or some combination of the three. Only the supportive services that are
authorized in the written agreement with the supportive service provider may be provided to
program participants by that supportive service provider and only program participants that
are eligible for those supportive services may be served. As such, supportive services
providers must demonstrate through their documentation that the individuals served were
eligible to receive the supportive services that were authorized under the written agreement
in order for those costs to be eligible.
Consistent with the requirements in this section, the PJ may set a maximum dollar amount
that a program participant may receive for each type of service described in Section
VI.D.4.c. below and may also set a maximum period for which a program participant may
receive any of the types of assistance or services.
a.Oversight of Eligible Costs: All supportive service costs paid for by HOME-ARP must
comply with the requirements of this Notice, including requirements in 2 CFR part 200,
subpart E, Cost Principles that require costs be necessary and reasonable. If a qualifying
household is already receiving the same eligible supportive service or has been approved
to receive the same service through another program or provider, the program participant
does not have a need for the HOME-ARP service and the costs related to the service do
not comply with the Cost Principles. The PJ is responsible for establishing requirements
that allow a program participant to receive only the HOME-ARP services needed so
there is no duplication of services or assistance in the use of HOME-ARP funds for
supportive services. This may include the use of systems such as Homeless
Management Information Systems in coordination with local supportive service
providers, CoCs, and other nonprofit organizations.
b.Direct provision of services: PJs contracting with service providers engaged directly in
the provision of services under the HOME-ARP eligible supportive services categories,
shall have written agreements or contracts that comply with the requirements of this
Notice and, to the extent practicable, enter into agreements or contracts in amounts that
cover the actual total program costs and administrative overhead to provide the services
contracted.
If the services outlined in paragraph c. below are being directly delivered by the PJ or a
subrecipient, the following costs are eligible project delivery costs for those services:
the costs of labor or supplies and materials incurred by the PJ or subrecipient in
directly providing supportive services to program participants.
the salary and benefit packages of the PJ and subrecipient staff who directly deliver
the services.
These project delivery costs must be attributable to the identifiable objective of the
service delivered, otherwise they are administrative costs of the PJ or subrecipient.
c.Eligible Costs:
i.Eligible Costs for McKinney Vento Supportive Services and Homelessness
Prevention Services: Eligible costs for supportive services under either of these two
categories include costs associated with the following services:
(A)Child care: The costs of child care for program participants, including
providing meals and snacks, and comprehensive and coordinated
developmental activities, are eligible. The child care center must be licensed
by the jurisdiction in which it operates in order for its costs to be eligible. The
following conditions also apply:
Children must be under the age of 13 unless the children have a disability.
Children with a disability must be under the age of 18.
(B)Education services: The costs of improving knowledge and basic educational
skills are eligible costs including:
Instruction or training in consumer education, health education, substance
abuse prevention, literacy, English as a Second Language, and General
Educational Development (GED).
Screening, assessment, and testing; individual or group instruction;
tutoring; provision of books, supplies, and instructional material;
counseling; and referral to community resources.
(C)Employment assistance and job training: The costs of establishing and/or
operating employment assistance and job training programs are eligible,
including classroom, online and/or computer instruction, on-the-job
instruction, services that assist individuals in securing employment, acquiring
learning skills, and/or increasing earning potential. The cost of providing
reasonable stipends to program participants in employment assistance and job
training programs is also an eligible cost.
Learning skills include those skills that can be used to secure and retain a
job, including the acquisition of vocational licenses and/or certificates.
Services that assist individuals in securing employment consist of:
Employment screening, assessment, or testing;
Structured job skills and job-seeking skills;
Special training and tutoring, including literacy training and pre-
vocational training;
Books and instructional material;
Counseling or job coaching; and
Referral to community resources.
(D)Food: The cost of providing meals or groceries to program participants is
eligible.
(E)Housing search and counseling services: Costs of assisting eligible program
participants to locate, obtain, and retain suitable housing are eligible. Services
are:
Development of an action plan for locating housing;
Housing search;
Tenant counseling;
Securing utilities;
Making moving arrangements;
Outreach to and negotiation with owners;
Assistance submitting rental applications and understanding leases;
Assessment of housing for compliance with HOME-ARP requirements
for TBRA assistance in Section VI.C of this Notice and financial
assistance for short-term and medium-term rental payments provided
under Section VI.D.4.c.i.(R) below;
Assistance obtaining utilities; and
Tenant counseling;
Mediation with property owners and landlords on behalf of eligible
program participants;
Credit counseling, accessing a free personal credit report, and resolving
personal credit issues; and
Payment of rental application fees;
Other Housing counseling costs, as defined in 24 CFR 5.100, funded
with or provided in connection with grant funds must be carried out in
accordance with 24 CFR 5.111.
Please Note: When PJs or subrecipients provide housing services to eligible
persons that are incidental to a larger set of holistic case management
services, these services do not meet the definition of Housing counseling,
as defined in 24 CFR 5.100, and therefore are not required to be carried out
in accordance with the certification requirements of 24 CFR 5.111.
(F)Legal services: Eligible costs are the fees charged by licensed attorneys and
by person(s) under the supervision of licensed attorneys, for advice and
representation in matters that interfere with a qualifying individual or
family's ability to obtain and retain housing.
Eligible subject matters are child support; guardianship; paternity;
emancipation; legal separation; orders of protection and other legal
remedies for victims of domestic violence, dating violence, sexual
assault, human trafficking, and stalking; appeal of veterans and public
benefit claim denials; landlord-tenant disputes; and the resolution of
outstanding criminal warrants; landlord/tenant matters, provided that the
services must be necessary to resolve a legal problem that prohibits the
program participant from obtaining permanent housing or will likely
result in the program participant losing the permanent housing in which
the program participant currently resides.
Legal services for immigration and citizenship matters and for issues
related to mortgages and homeownership are ineligible. Retainer fee
arrangements and contingency fee arrangements are prohibited.
Services may include client intake, receiving and preparing cases for
trial, provision of legal advice, representation at hearings, and
counseling.
Fees based on the actual service performed (i.e., fee for service) are also
eligible, but only if the cost would be less than the cost of hourly fees.
Filing fees and other necessary court costs are also eligible. If the
subrecipient is a legal services provider and performs the services itself,
the eligible costs are the subrecipient's employees' salaries and other
costs necessary to perform the services.
(G)Life skills training: The costs of teaching critical life management skills that
may never have been learned or have been lost during the course of physical
or mental illness, domestic violence, dating violence, sexual assault, stalking,
human trafficking, substance abuse, and homelessness are eligible. These
services must be necessary to assist the program participant to function
independently in the community. Life skills training includes:
the budgeting of resources and money management, household
management, conflict management, shopping for food and other needed
items, nutrition, the use of public transportation, and parent training.
(H)Mental health services: Eligible costs are the direct outpatient treatment of
mental health conditions that are provided by licensed professionals.
Mental health services are the application of therapeutic processes to
personal, family, situational, or occupational problems in order to bring
about positive resolution of the problem or improved individual or family
functioning or circumstances. Problem areas may include family and
marital relationships, parent-child problems, or symptom management.
Services are crisis interventions; counseling; individual, family, or group
therapy sessions; the prescription of psychotropic medications or
explanations about the use and management of medications; and
combinations of therapeutic approaches to address multiple problems.
(I)Outpatient health services: Eligible costs are the direct outpatient treatment of
medical conditions when provided by licensed medical professionals
including:
Providing an analysis or assessment of a program participant’s health
problems and the development of a treatment plan;
Assisting program participants to understand their health needs;
Providing directly or assisting program participants to obtain and utilize
appropriate medical treatment;
Preventive medical care and health maintenance services, including in-
home health services and emergency medical services;
Provision of appropriate medication;
Providing follow-up services; and
Preventive and non-cosmetic dental care.
(J)Outreach services: The costs of activities to engage qualified populations for
the purpose of providing immediate support and intervention, as well as
identifying potential program participants, are eligible.
Eligible costs include the outreach worker's transportation costs and a cell
phone to be used by the individual performing the outreach.
Costs associated with the following services are eligible: initial
assessment; crisis counseling; addressing urgent physical needs, such as
providing meals, blankets, clothes, or toiletries; actively connecting and
providing people with information and referrals to homeless and
mainstream programs; and publicizing the availability of the housing
and/or services provided within the PJ’s geographic area.
(K)Substance abuse treatment services: Eligible substance abuse treatment
services are designed to prevent, reduce, eliminate, or deter relapse of
substance abuse or addictive behaviors and are provided by licensed or
certified professionals. The costs include:
Program participant intake and assessment;
Outpatient treatment;
Group and individual counseling
Drug testing;
Inpatient detoxification and other inpatient drug or alcohol treatment are
ineligible.
(L)Transportation: Eligible costs are:
The costs of program participant's travel on public transportation or in a
vehicle provided by the PJ or subrecipient to and from medical care,
employment, childcare, or other services eligible under this Notice;
Mileage allowance for service workers to visit program participants and
to carry out housing inspections;
The cost of purchasing or leasing a vehicle in which staff transports
program participants and/or staff serving program participants;
The cost of gas, insurance, taxes, and maintenance for the vehicle;
The costs of PJ or subrecipient staff to accompany or assist program
participants to utilize public transportation; and
If public transportation options are not sufficient within the area, the PJ
may make a one-time payment on behalf of a program participant
needing car repairs or maintenance required to operate a personal vehicle,
subject to the following:
Payments for car repairs or maintenance on behalf of the program
participant may not exceed 10 percent of the Blue Book value of the
vehicle (Blue Book refers to the guidebook that compiles and quotes
prices for new and used automobiles and other vehicles of all makes,
models, and types);
Payments for car repairs or maintenance must be paid by the PJ or
subrecipient directly to the third party that repairs or maintains the
car; and
PJs or subrecipients may require program participants to share in the
cost of car repairs or maintenance as a condition of receiving
assistance with car repairs or maintenance.
The PJ must establish policies and procedures surrounding payments for
the cost of gas, insurance, taxes, the one-time payment for car repairs or
maintenance described above, and maintenance for vehicles of program
participants. Such costs must be limited to program participants with the
inability to pay for such costs and who, without such assistance, would
not be able to participate in eligible services under this Section VI.D.4.c.i.
(M)Case management: The costs of assessing, arranging, coordinating, and
monitoring the delivery of individualized services to meet the needs of the
program participant(s) are eligible costs. PJs and subrecipients providing these
supportive services must have written standards for providing the assistance.
Eligible costs are those associated with the following services and activities:
Conducting the initial evaluation, including verifying and documenting
eligibility, for individuals and families applying for supportive services;
Counseling;
Developing, securing, and coordinating services;
Using a centralized or coordinated assessment system that complies with
the requirements of Section IV.C of the Notice;
Obtaining federal, State, and local benefits;
Monitoring and evaluating program participant progress;
Providing information and referrals to other providers;
Providing ongoing risk assessment and safety planning with victims of
domestic violence, dating violence, sexual assault, stalking, and human
trafficking;
Developing an individualized housing and service plan, including
planning a path to permanent housing stability; and
Conducting re-evaluations of the program participant's eligibility and the
types and amounts of assistance the program participant needs.
(N)Mediation: HOME-ARP funds may pay for mediation between the program
participant and the owner or person(s) with whom the program participant is
living, provided that the mediation is necessary to prevent the program
participant from losing permanent housing in which the program participant
currently resides.
(O)Credit repair: HOME-ARP funds may pay for credit counseling and other
services necessary to assist program participants with critical skills related to
household budgeting, managing money, accessing a free personal credit report,
and resolving personal credit problems. This assistance does not include the
payment or modification of a debt.
(P)Landlord/Tenant Liaison: Costs of liaison services between property
managers/owners and program participants are eligible HOME-ARP costs and
may include:
Landlord outreach;
Physical inspections and rent reasonable studies as needed to secure
units;
Rental application fees and security deposits for clients, in accordance
with the financial assistance costs requirements in (R);
Mediation services in (N) for housing issues that may arise between
owner, property manager, or other residents and clients;
Coordination or assistance with the provision of other HOME-ARP
eligible services to assist clients to maintain permanent housing.
(Q)Services for special populations: HOME-ARP funds may be used to provide
services for special populations, such as victim services, so long as the costs of
providing these services are eligible under this section. The term victim services
means services that assist program participants who are victims of domestic
violence, dating violence, sexual assault, stalking, or human trafficking including
services offered by rape crisis centers and domestic violence shelters, and other
organizations with a documented history of effective work concerning domestic
violence, dating violence, sexual assault, stalking, or human trafficking.
(R)Financial assistance costs: HOME-ARP funds may be used to pay housing
owners, utility companies, and other third parties for the following costs, as
applicable:
Rental application fees: Rental housing application fee that is charged by
the owner to all applicants.
Security deposits: A security deposit that is equal to no more than 2
months’ rent. This assistance is separate and distinct from the provision
of financial assistance for First and Last Month’s rent provided under this
section and cannot be used to duplicate those costs.
Utility deposits: HOME-ARP funds may pay for a standard utility
deposit or initiation fee required by the utility company or owner (if
owner-paid utilities are provided) for all program participants for the
following utilities:
Gas
Electric
Water
Sewer
Utility payments: HOME-ARP funds may pay for up to 24 months of
utility payments per program participant, per service, including up to 6
months of utility payments in arrears, per service. A partial payment of a
utility bill counts as one month. This assistance may only be provided if
the program participant or a member of the same household has an
account in his or her name with a utility company or proof of
responsibility to make utility payments. Eligible utility services are gas,
electric, water, and sewage. No program participant shall receive more
than 24 months of utility assistance within any 3-year period.
Moving costs: HOME-ARP funds may pay for moving costs, such as
truck rental or hiring a moving company. This assistance may include
payment of temporary storage fees for up to 3 months, provided that the
fees are accrued after the date the program participant begins receiving
assistance under this section of the Notice and before the program
participant moves into permanent housing. Payment of temporary
storage fees in arrears is not eligible.
First and Last month's rent: If necessary to obtain housing for a program
participant, HOME-ARP funds may be used to make a pre-payment of
the first and last month's rent under a new lease to the owner at the time
the owner is paid the security deposit for the program participant’s
tenancy in the housing. This assistance must not exceed two month's rent
and must be tracked for purposes of determining the total short- and
medium-term financial assistance for rent that the program participant
may receive. This assistance is separate and distinct from financial
assistance for Security Deposits provided under this section and cannot
be used to duplicate those costs.
Payment of rental arrears: HOME-ARP funds may be used for a one-
time payment for up to 6 months of rent in arrears, including any late fees
or charges on those arrears, if necessary for the household to maintain
their existing housing or, for those without housing, if necessary to
remove a demonstrated barrier to obtaining housing.
(S)Short-term and medium-term financial assistance for rent: Subject to the
following conditions, a PJ may provide a program participant with short-term or
medium-term financial assistance for rent, provided that the total financial
assistance provided, including any pre-payment of first and last month’s rent as
described above, does not exceed 24 months of rental payments over any 3-year
period.
Short-term means up to 3 months.
Medium-term means more than 3 months but not more than 24 months.
The PJ may make rental payments only to an owner with whom the PJ
has entered into a financial assistance agreement for rental payment. The
financial assistance agreement must set forth the terms under which rental
payments will be provided, including the requirements that apply under
this Notice. The financial assistance agreement must provide that, during
the term of the agreement, the owner must give the PJ a copy of any
notice to the program participant to vacate the housing unit or any
complaint used under State or local law to commence an eviction action
against the program participant. The owner must serve written notice
upon the program participant at least 30 days before termination of
tenancy specifying the grounds for the action. Each financial assistance
agreement that is executed or renewed must comply with the
requirements in 24 CFR 92.359.
The PJ must make timely payments to each owner in accordance with the
financial assistance agreement. The financial assistance agreement must
contain the same payment due date, grace period, and late payment
penalty requirements as the program participant's lease. The PJ is solely
responsible for paying late payment penalties that it incurs with non-
HOME-ARP funds.
Rental payments cannot be provided unless the rent does not exceed
the Fair Market Rent established by HUD, as provided under 24 CFR
part 888, and complies with HUD's standard of rent reasonableness,
as established under 24 CFR 982.507.
Each program participant receiving financial assistance for rental
payments must have a legally binding, written lease for the rental
unit, unless the assistance is solely for rental arrears. The lease must
be between the owner and the program participant. Where the
financial assistance is solely for rental arrears, an oral agreement may
be accepted in place of a written lease, if the agreement gives the
program participant an enforceable leasehold interest under state law
and the agreement and rent owed are sufficiently documented by the
owner's financial records, rent ledgers, or canceled checks. New
leases must have an initial term of 1 year unless a shorter period is
agreed upon by the program participant and owner. The lease
requirements in 24 CFR 92.359 apply to this financial assistance.
PJs must establish requirements to prevent the provision of short- or
medium-term financial assistance for rent for the same period for
which a program participant is receiving rental assistance or living in
housing provided with ongoing assistance (such as project-based
rental assistance or operating subsidies).
If a program participant receiving financial assistance for short- or
medium-term rental payments under this section meets the conditions
for an emergency transfer under 24 CFR 5.2005(e), HOME-ARP
funds may be used to pay amounts owed for breaking a lease to
effectuate an emergency transfer. These costs are not subject to the
24-month limit on rental payments.
Ineligible costs - Financial assistance cannot be provided to a program
participant who is receiving the same type of assistance through other public
sources. Financial assistance also cannot be provided to a program participant
who has been provided with replacement housing payments under the Uniform
Relocation Assistance and Real Property Acquisition Policies Act of 1970, as
amended (42 USC 4601 et seq.) and its implementing regulations at 49 CFR part
24, or Section 104(d) of the Housing and Community Development Act of 1974
(42 USC 5304(d) and its implementing regulations at 24 CFR part 42, during the
period of time covered by the replacement housing payments.
ii.Eligible Costs Associated with Housing Counseling under 24 CFR 5.100 and
5.111: Costs associated with housing counseling services as defined at 24 CFR
5.100 and 5.111 are eligible under HOME-ARP. As homeowner assistance and
related services are not eligible HOME-ARP activities, costs for the provision of
services related to mortgages and homeownership to existing homeowners are
also not eligible under HOME-ARP. If a program participant is a candidate for
homeownership, costs associated with pre-purchase homebuying counseling,
education and outreach are eligible under HOME-ARP. Eligible costs are those
costs associated with the services listed in 24 CFR part 214 and include, but are
not limited to:
(A)Staff salaries and overhead costs of HUD-certified housing counseling
agencies related to directly providing eligible housing counseling services
to HOME-ARP program participants;
(B)Development of a housing counseling workplan;
(C)Marketing and outreach;
(D)Intake;
(E)Financial and housing affordability analysis;
(F)Action plans that outline what the housing counseling agency and the client
will do to meet the client's housing goals and that address the client's
housing problem(s);
(G)Follow-up communication with program participants.
5.Termination of assistance to program participants:
a.Termination of assistance: The PJ may terminate assistance to a program participant
who violates program requirements or conditions of occupancy or no longer needs the
services as determined by the PJ. Termination under this section does not bar the PJ
from providing further assistance at a later date to the same individual or family under
this Notice.
b.Due process: The PJ must establish policies and procedures for termination of
assistance to program participants. In terminating assistance to a program participant,
the PJ must provide a formal process that recognizes the rights of individuals receiving
assistance under the due process of law. This process, at a minimum, must consist of:
i.Providing the program participant with a written copy of the program rules and
the termination process before the participant begins to receive assistance;
ii.Written notice to the program participant containing a clear statement of the
reasons for termination;
iii.A review of the decision, in which the program participant is given the
opportunity to present written or oral objections before a person other than the
person (or a subordinate of that person) who made or approved the termination
decision; and
iv.Prompt written notice of the final decision to the program participant.
During this process, the PJ must provide effective communication and accessibility for
individuals with disabilities, including the provision of reasonable accommodations.
Similarly, the PJ must provide meaningful access to persons with LEP.
6.Commitment: For supportive services, commitment means that before disbursing any
HOME-ARP funds to any entity, the PJ executed a legally binding written agreement that
complies with HOME-ARP requirements with the contractor or subrecipient providing the
supportive service (that includes the date of the signature of each person signing the
agreement).
7.Policies and Procedures: PJs must establish the following policies and procedures in
compliance with this notice:
a.Tenant selection procedures in accordance with Section IV.C.2 and this section;
b.Eligibility of program participants in other HOME-ARP activities for supportive
services under Section VI.D.4.c.i above including the length of time that program
participants may be served by HOME-ARP TBRA and/or HOME ARP rental housing
before they will no longer be eligible as a qualifying population for purposes of this
section;
c.If the PJ chooses to set maximum amounts and/or maximum periods for assistance or
services, the maximum dollar amount that a program participant may receive for each
type of service described in Section VI.D.4.c.i above and/or maximum periods for
which a program participant may receive any of the types of assistance or services
under this section;
d.Documentation of eligible costs;
e.Requirements that allow a program participant to receive only the HOME-ARP services
needed so there is no duplication of services or assistance in the use of HOME-ARP
funds for supportive services;
f.Payments for the cost of gas, insurance, taxes, the one-time payment for car repairs or
maintenance described above, and maintenance for vehicles of program participants;
g.Financial assistance for short-term and medium-term rental payments under this Notice,
including requirements to prevent a duplication of rental or financial assistance
provided to a program participant;
h.Housing stability case management; and
i.Termination of assistance to program participants.
8.Project Completion: Project completion for a HOME-ARP Supportive Services project
means the final drawdown has been disbursed for the project.
E. Acquisition and Development of Non-Congregate Shelter
A non-congregate shelter (NCS) is one or more buildings that provide private units or rooms as
temporary shelter to individuals and families and does not require occupants to sign a lease or
occupancy agreement. HOME-ARP funds may be used to acquire and develop HOME-ARP
NCS for individuals and families in qualifying populations. This activity may include but is not
limited to the acquisition of land and construction of HOME-ARP NCS or acquisition and/or
rehabilitation of existing structures such as motels, hotels, or other facilities to be used for
HOME-ARP NCS. HOME-ARP funds may not be used to pay the operating costs of HOME-
ARP NCS. Consequently, PJs must consider the availability of ongoing operating funds for the
HOME-ARP NCS so that the HOME-ARP NCS can remain viable through the restricted use
period specified in this Notice.
During the restricted use period, HOME-ARP NCS may:
Remain as HOME-ARP NCS in compliance with the requirements of this Notice.
Be used as a non-congregate emergency shelter under the Emergency Solutions Grants
(ESG) program (Subtitle B of title IV of the McKinney-Vento Homeless Assistance Act)
(42 USC 11371 et seq.), in which case the non-congregate shelter must be operated in
compliance with all requirements at 24 CFR part 576 that apply when ESG funds are
provided for operating costs or essential services in the shelter. During any period for
which ESG funds are provided, the applicable ESG requirements shall govern in the
event of any conflict with HOME-ARP requirements.
Be converted to permanent affordable housing according to the requirements established
in Section VI.E.11 of this Notice.
Be converted to permanent housing as defined in Subtitle C of title IV of the McKinney-
Vento Homeless Assistance Act (42 USC 11381 et seq.) according to requirements of
this Notice and 24 CFR part 578.
1.Admission and Occupancy: HOME-ARP NCS units may only be occupied by individuals
or families that meet the criteria for one or more of the qualifying populations as defined in
Section IV.A. of this Notice. Where applicable, occupancy of NCS units by qualifying
populations must be in accordance with the requirements in Section IV.C of this Notice.
The PJ must not allow qualifying populations to be charged occupancy fees or other charges
to occupy a HOME-ARP NCS unit unless the PJ determines such fees and charges to be
customary and reasonable and the charges comply with 24 CFR 578.77(b).
To ensure that access to HOME-ARP NCS by qualifying populations is effectively
integrated with other assistance and services, PJs are encouraged to incorporate each
HOME-ARP NCS into the CE established by the CoC(s) for the area the NCS is funded to
serve, provided that the CE is used in accordance with Section IV.C of this Notice. Whether
or not packaged with NCS funding, HOME-ARP supportive services may also be provided
as needed to qualifying individuals and families served by the HOME-ARP NCS in
accordance with the requirements contained in Section VI.D of this Notice.
No individual or family may be denied admission to or removed from a HOME-ARP NCS
unit on the basis or as a direct result of the fact that the individual or family is or has been a
victim of domestic violence, dating violence, sexual assault, stalking, or human trafficking if
the individual or family meets the criteria of one of the qualifying populations.
2.Eligible Activities: HOME-ARP funds may be used to acquire and/or rehabilitate or
construct HOME-ARP NCS units to serve qualifying populations. Acquisition of vacant
land or demolition of existing structures may be undertaken only as part of a HOME-ARP
NCS project. HOME-ARP NCS units acquired and/or developed with HOME-ARP funds
must meet the requirements of this Notice, i.e., be used as HOME-ARP NCS or used as
emergency shelter under ESG for the restricted use period established in Section VI.E.9 of
this Notice.
3.Eligible Costs: HOME-ARP funds may be used for actual costs of acquiring NCS or
developing HOME-ARP NCS as follows:
a.Acquisition Costs: Costs to acquire improved or unimproved real property.
b.Demolition Costs: Costs of demolishing existing structures for the purpose of
developing HOME-ARP NCS.
c.Development Hard Costs: Costs identified in 24 CFR 92.206(a) to rehabilitate or
construct HOME-ARP NCS units, except costs must be for meeting the physical
standards established in Section VI.E.7 of this Notice.
d.Site Improvements: Costs to make improvements to the project site, including
installation of utilities or utility connections, and the construction or rehabilitation of
laundry, community facilities, on-site management, or supportive service offices.
e.Related Soft Costs: Reasonable and necessary costs incurred by the PJ and owner
associated with the financing, acquisition, and development of HOME-ARP NCS
projects, including costs identified in 24 CFR 92.206(d) with the following exceptions:
i.Costs to provide information services such as affirmative marketing to
prospective homeowners and tenants are not eligible.
ii.Costs of funding an initial operating deficit reserve are not eligible.
iii.Costs of project-specific assistance to community housing development
organizations, including technical assistance and site control loans or seed
money loans as specified in 24 CFR 92.301 are not eligible.
f.Replacement Reserve: Costs to capitalize a replacement reserve to pay the reasonable
and necessary costs of replacing major systems and their components whose useful life
will end during the restricted use period. Major systems include structural support,
roofing, cladding, and weatherproofing, plumbing, electrical and HVAC. The costs of
replacing major systems must be determined through a Capital Needs Assessment or
documented in writing after an inspection by the PJ or PJ-selected contractor to assess
the remaining useful life of major systems expected upon completion of the HOME-
ARP NCS project. The costs of a replacement reserve must be included in the project
budget in the written agreement along with a list of major systems to be replaced with
the reserve and projected replacement schedule during the restricted use period (i.e.,
reserve for replacement analysis). Rehabilitation planned to be completed with HOME-
ARP NCS reserve funds at a later date must be included in IDIS as a rehabilitation
activity at initial commitment.
4.Prohibited Costs: HOME-ARP funds may not be used to:
a.Pay any operating costs of a HOME-ARP NCS project.
b.Provide additional HOME-ARP investment in a HOME-ARP NCS project during the
restricted use period, except that additional HOME-ARP funds can be invested in the
project up to one year after project completion in IDIS for eligible costs.
c.Pay costs of a conversion of HOME-ARP NCS as described in Section VI.E.11 of this
Notice.
d.Provide non-Federal matching contributions required under any other Federal program.
e.Provide assistance for uses authorized under section 9 of the U.S. Housing Act of 1937
(42 U.S.C. 1437g) (Public Housing Capital and Operating Funds).
f.Provide assistance to eligible low-income housing under 24 CFR part 248 (Prepayment
of Low-Income Housing Mortgages).
g.Pay for the acquisition of property owned by the PJ, except for property acquired by the
PJ with HOME-ARP NCS funds, or property acquired in anticipation of carrying out a
HOME-ARP NCS project.
h.Pay delinquent taxes, fees, or charges on properties to be assisted with HOME-ARP
NCS funds.
i.Pay for any cost that is not eligible under this Notice.
5.Commitment: PJs must commit HOME-ARP funds before disbursing funds for a HOME-
ARP NCS project. HOME-ARP funds are committed to a HOME-ARP NCS project when
the PJ executes a legally binding written agreement that meets the requirements in this
Notice.
If the project is an acquisition-only activity, the PJ may commit HOME-ARP funds if it
reasonably expects the project will be operated as HOME-ARP NCS within 6 months of the
date of acquisition. Acquisition-only HOME-ARP NCS projects may be performed when
the PJ reasonably determines that the units acquired will not require rehabilitation to meet
the property standards in Section VI.E.7 of this Notice. If the project is not in active use as
HOME-ARP NCS within 6 months of the acquisition, HUD may require the PJ to submit a
schedule for placing the project into operation within a period determined by HUD or may
require the PJ to repay the funds to its HOME-ARP Treasury Account.
For projects that will involve rehabilitation or new construction with or without acquisition,
the PJ may commit HOME-ARP funds if it reasonably expects development to begin within
12 months of the date of commitment.
6.Project Development Due Diligence: HOME-ARP NCS projects must meet the
requirements of this Notice for the restricted use period. Consequently, before awarding
HOME-ARP funds to a HOME-ARP NCS project, PJs must determine that acquisition
and/or development is financially feasible. The PJ is responsible for maintaining continued
operation of the NCS in accordance with this Notice throughout the restricted use period.
Therefore, the PJ must consider whether the HOME-ARP NCS project has secured or has a
high likelihood of securing operating funding because operating costs cannot be paid with
HOME-ARP.
PJs must assess HOME-ARP NCS projects, including a review of information from the
owner and/or developer that demonstrates the project’s financial feasibility throughout the
restricted use period. Before awarding funds for HOME-ARP NCS, the PJ must:
Require that the developer submit evidence of appropriate skills and experience
related to the development of shelters or similar facilities.
Require the owner to submit evidence of prior experience with operating shelters.
Require an acquisition or development budget, timeline, and sources and uses
statement for the acquisition and/or development of the project be submitted for
review.
Require the owner to submit a proposed operating budget, including secured sources
for operating costs and any operating gap that will require additional assistance. If
there is a gap in the operating budget, the PJ should require the owner to submit a
plan for securing additional private, local, state, or Federal funding sufficient for
successful operation of the project.
Before committing funds, PJs should also determine whether the owner intends to continue
operating the project as HOME-ARP NCS or emergency shelter NCS under ESG for the
entire full restricted use period or plans to convert the HOME-ARP NCS to permanent
affordable housing or CoC permanent housing during the restricted use period, once the
minimum use period for HOME-ARP NCS established in this section is completed. If a
HOME-ARP NCS project owner intends to convert the project to CoC permanent housing
or permanent supportive housing during the restricted use period, the PJ is encouraged to
pursue partnership and leveraging opportunities with the CoC early in the planning stage of
a HOME-ARP NCS project. In such instances, the PJ should consider the physical design
needs of an eventual conversion in its evaluation of the HOME-ARP NCS project.
7.Property and Habitability Standards: HOME-ARP NCS projects must meet the
minimum HOME-ARP property standards prior to occupancy and the HOME-ARP NCS
ongoing property standards throughout the restricted use period as described in this Notice.
An “acquisition only” project must meet the HOME-ARP NCS minimum property
standards described in paragraph a. below at the time of acquisition. If the project requires
rehabilitation or repair to meet the minimum property standards, the project is considered
acquisition and rehabilitation irrespective of the source of funds used for the rehabilitation
or repair and must meet the NCS rehabilitation standards in paragraph b. below. In addition,
PJs must meet the standards required in this Notice for rehabilitation or new construction, as
applicable. The PJ must determine that construction contracts and documents describe the
work to be completed in adequate detail to establish a basis for inspection to determine that
all work was completed to contracted specifications and that the project met the HOME-
ARP NCS property standards. Project classification as rehabilitation or new construction is
determined by the PJs local code requirements based on specific work to be completed. PJs
may also choose to adopt a standard that exceeds the minimum standards described here.
The written agreement must impose the HOME-ARP NCS property standards or the PJ’s
locally developed standards and require that the PJ or its representatives have access to the
property to perform inspections during development and throughout the restricted use
period.
a.Minimum HOME-ARP NCS Property Standards: All HOME-ARP NCS units and
common areas must meet all applicable State and local codes, ordinances, and
requirements and the applicable provisions of HUD’s Lead Safe Housing Rules at 24
CFR Part 35. In addition, all HOME-ARP NCS projects must meet the following
minimum safety, sanitation, accessibility, and privacy standards:
i.Must be structurally sound to protect occupants from the elements and not pose
any threat to health and safety of the occupants.
ii.Must be accessible in accordance with section 504 of the Rehabilitation Act (29
U.S.C. 794) and implementing regulations at 24 CFR part 8; the Fair Housing
Act (42 U.S.C. 3601 et seq.) and implementing regulations at 24 CFR part 100;
and Title II of the Americans with Disabilities Act (42 U.S.C. 12131 et seq.) and
implementing regulations at 24 CFR part 35, all as applicable.
iii.Must provide each individual or family with an acceptable, individual room to
sleep which includes adequate space and security for themselves and their
belongings.
iv.Must have a natural or mechanical means of ventilation. The interior air must be
free of pollutants at a level that might threaten or harm the health of occupants.
v.Must have a water supply free of contamination.
vi.Must have in-unit sanitary facilities that are in proper operating condition and are
adequate for personal cleanliness and the disposal of human waste.
vii.Must provide necessary heating/cooling facilities in proper operating condition.
viii.Must have adequate natural or artificial illumination to permit normal indoor
activities and support health and safety. There must be sufficient electrical
sources to permit the safe use of electrical appliances.
ix.Food preparation areas, if any, must contain suitable space and equipment to
store, prepare, and serve food in a safe and sanitary manner.
x.Must provide one working smoke detector and one working carbon monoxide
detector in each unit. All smoke and carbon monoxide detectors and alarm
systems must be designed for hearing-impaired residents. All public areas of the
shelter must have at least one working smoke detector and one carbon monoxide
detector. There must also be a second means of exiting the building in the event
of fire or other emergency.
Minimum HOME-ARP NCS Rehabilitation Standards: HOME-ARP NCS rehabilitation
projects must meet all applicable State and local codes, ordinances, and requirements ,
or in the absence of such codes, International Residential Code or the International
Building Code (as applicable), and must comply with the Lead Safe Housing Rule at 24
CFR Part 35. Additionally, PJs must consider the remaining useful life of major
systems. PJs are encouraged to use a Capital Needs Assessment to determine the
reasonable and necessary investment of HOME-ARP funding in rehabilitation projects
and expected cost of ongoing replacement needs during the restricted use period. If
HOME-ARP funding will capitalize a replacement reserve, the PJ must determine the
remaining useful life of major systems through a Capital Needs Assessment or other PJ
inspection documented in writing, in accordance with requirements for capitalized
replacement reserve costs in VI.E.3.
Minimum HOME-ARP NCS New Construction Standards: HOME-ARP NCS projects
that are newly constructed must meet all applicable State and local codes, ordinances,
and requirements, or in the absence of such codes, the International Residential Code or
the International Building Code (as applicable to the type of structure). HOME-ARP
funds cannot be used to fund a replacement reserve for newly constructed HOME-ARP
NCS.
b.On-going Property Standards and Inspections: PJs must develop ongoing inspection
procedures to verify that HOME-ARP NCS projects meet the minimum HOME-ARP
NCS property standards established in this Notice throughout the restricted use period.
A PJ’s inspection procedures must require annual inspections that are applied
consistently to all HOME-ARP NCS projects. When deficiencies are identified, a
follow-up inspection to verify that deficiencies are corrected must occur within 6
months. The PJ may establish a list of non-hazardous deficiencies for which correction
can be verified by third party documentation (e.g., paid invoice or work order) rather
than reinspection. If life-threatening deficiencies exist, the owner or operator of the
HOME-ARP NCS must correct such deficiencies immediately. In such instances, the PJ
must re-inspect to verify the deficiency has been corrected within 14 days.
8.Project Completion: Project Completion for HOME-ARP NCS means:
All necessary title transfer requirements and construction work has been performed;
The project complies with the requirements of this Notice, including the HOME-
ARP NCS property standards as evidenced by a final inspection;
The project is actively operating as a HOME-ARP NCS;
Final drawdown of HOME-ARP funds has been disbursed; and
Project completion information is entered into IDIS.
All HOME-ARP NCS projects must be completed within 4 years of the date of commitment
of the HOME-ARP funds based on the date of the last signature on the written agreement.
If the PJ fails to complete a project within 4 years of project completion, it must comply
with the terminated project requirements at 24 CFR 92.205(e)(2). HOME-ARP NCS
rehabilitation and new construction projects must begin operating as active shelters within 6
months after the date of completion of the construction work. If the HOME-ARP NCS
project is not in use within 6 months, HUD may require the PJ to submit a schedule for
placing the project into operation as an active shelter within a period determined by HUD or
may require the PJ to repay the HOME-ARP funds to its HOME-ARP Treasury Account.
9.Restricted Use Period: HOME-ARP NCS projects must comply with the requirements of
this Notice for not less than the restricted use period specified in this Notice. PJs must
impose the HOME-ARP NCS requirements through a deed restriction, covenant running
with the land, legally binding agreement restricting the use of the property and recorded on
the property in accordance with State recordation laws, or other mechanism approved by
HUD. The use restriction should not identify that the property is prioritized for victims of
domestic violence, dating violence, sexual assault, stalking or human trafficking. This use
restriction must require that the property is operated as HOME-ARP NCS or non-congregate
emergency shelter under ESG for the required restricted use period except that HOME-ARP
NCS projects may be converted to permanent affordable housing or CoC permanent housing
after being operated as HOME-ARP NCS for the applicable minimum use period prior to
conversion as described in Section VI.E.11. If the HOME-ARP NCS is converted, the PJ
must amend its use restriction to reflect the change in requirements for the remainder of the
restricted use period.
The restricted use period begins at project completion as defined in Section VI.E.8 of this
Notice and must be imposed for at least the following periods:
a.New Construction: Newly constructed HOME-ARP NCS units must be operated as
HOME-ARP NCS units for qualifying populations for a restricted use period of 15
years, regardless of the amount of HOME-ARP funds invested in the project.
b.Rehabilitation: HOME-ARP NCS units which receive any amount of HOME-ARP
funds for rehabilitation but are not designated as new construction by the PJ’s state or
local building code requirements must be operated as HOME-ARP NCS units for
qualifying populations for a restricted use period of 10 years.
c.Acquisition Only: Units acquired for use as HOME-ARP NCS that do not require
rehabilitation for occupancy must serve the qualifying populations for a restricted use
period of 10 years.
d.PJs may impose longer restricted use periods but must require the project remain
financially viable for the extended period.
10.Return of Replacement Reserve: HOME-ARP funds may capitalize a replacement reserve
for HOME-ARP NCS projects performing rehabilitation as described in Section VI.E.3 of
this Notice. Any unexpended HOME-ARP funds remaining in a project’s replacement
reserve at the completion of the restricted use period or upon conversion must be used or
returned as follows:
a. If the HOME-ARP NCS project will continue to operate in accordance with the HOME-
ARP NCS requirements and serve qualifying households beyond the HOME-ARP NCS
restricted use period demonstrated by enforceable restrictions imposed by the PJ in
accordance with Section VI.E.9, the project can retain the replacement reserve to pay
reasonable and necessary costs of replacing major systems and their components.
b. If the HOME-ARP NCS project will not continue to operate in accordance with the
HOME-ARP NCS requirements because the NCS is being converted to either CoC
permanent housing or permanent affordable housing as described in Section VI.E.11 of
this Notice and the HOME-ARP grant is still open, the remaining HOME-ARP funds in
the replacement reserve must be returned to the PJ’s HOME Investment Trust Fund
Treasury account.
c. If the HOME-ARP NCS grant has expired or is closed out, any remaining HOME-ARP
funds in the replacement reserve must be deposited in the PJ’s local HOME account,
recorded as a program income receipt in IDIS and used for eligible costs under 24 CFR
part 92.
11.Conversion of Non-Congregate Shelter to Rental Housing: The ARP authorizes the
conversion of HOME-ARP NCS units into permanent housing under subtitle C of title IV of
McKinney-Vento or permanent affordable housing as described in this section, during the
restricted use period. No HOME-ARP funds may be used for conversion. The written
agreement between the PJ and the owner of the HOME-ARP NCS project must describe
conversion as a possible outcome of the HOME-ARP NCS project; specify the conditions
under which conversion will be permitted; and require that the PJ approve any conversion in
advance.
a.Minimum Use Period: All HOME-ARP NCS projects must be operated as NCS for a
minimum period of time prior to conversion. The minimum use period prior to
conversion varies based on the original HOME-ARP NCS eligible activity undertaken
and the amount of funds invested in the project. If the HOME-ARP NCS project
involves rehabilitation, the minimum use period prior to conversion is based on the total
cost of the rehabilitation as a percentage of the total appraised value of the improved
property. A larger investment for rehabilitation will require operation as HOME-ARP
NCS for a longer minimum use period prior to conversion.
i.Acquisition Only: HOME-ARP NCS activities not requiring rehabilitation for
occupancy must be operated as HOME-ARP NCS for no less than 3 years from
project completion prior to conversion.
ii.Moderate Rehabilitation: Occurs when an NCS HOME-ARP project requires
rehabilitation and the total rehabilitation expenditure from all sources of less than 75
percent of the total appraised value of the improved property. HOME-ARP NCS
projects that receive moderate rehabilitation must be operated as HOME-ARP NCS
for no less than 5 years from project completion prior to conversion.
iii.Substantial Rehabilitation: Occurs when an NCS HOME-ARP project requires
rehabilitation and the total rehabilitation expenditure from all sources exceeds 75
percent of the total appraised value of the improved property. HOME-ARP NCS
projects that receive substantial rehabilitation must be operated as HOME-ARP NCS
for no less than 10 years from project completion before conversion.
iv.New Construction: Any HOME-ARP NCS project defined by the PJ’s state or local
code requirements as new construction must be operated as HOME-ARP NCS for no
less than 10 years from project completion prior to conversion.
Requirements for conversions vary depending on the type of conversion, as follows:
b.Permanent Affordable Housing: During the HOME-ARP NCS restricted use period but
only after the HOME-ARP NCS minimum use period, a PJ may provide written
approval to convert the project from HOME-ARP NCS to permanent affordable housing
(e.g., affordable multifamily rental housing, transitional housing) in accordance with the
requirements prescribed in the PJ’s written agreement with the HOME-ARP NCS
owner.
The converted permanent affordable housing project must meet the following
requirements:
i.Additional HOME-ARP Investment: The PJ is prohibited from investing additional
HOME-ARP funds to pay for the cost of converting the project from HOME-ARP
NCS to permanent affordable housing or to pay for operating the project as
permanent affordable housing. However, the PJ must determine that adequate
financial resources are committed to the project to bring it into compliance with the
property standards of Section VI.B.11 of this Notice and maintain the financial
feasibility of the project to be operated as permanent affordable housing for the
qualifying populations throughout the remaining restricted use period. If permitting
conversion of HOME-ARP NCS into permanent affordable housing, a PJ must
develop and evaluate the project in accordance with standardized underwriting
guidelines for conversion. At minimum, the PJ’s underwriting guidelines for
conversion must include an examination of the sources and uses of funds for the
conversion and a careful review of the project’s operating budget, including the
assumptions, projections, and reasonably expected increases in expenses throughout
the minimum compliance period defined in the section below, to determine that the
project will remain financially feasible to serve the qualifying populations for the
remainder of the restricted use period.
The PJ may assist households living in affordable rental housing units in converted
projects by providing HOME-ARP TBRA in accordance with Section VI.C of this
Notice or financial assistance services in accordance with Section VI.D.4.c.i.R.
ii.Minimum Compliance Period: The minimum compliance period for converted
housing is the period that the housing must continue to comply with the
requirements of this Notice and is equal to the balance of the HOME-ARP NCS
restricted use period. A PJ may impose a longer compliance period but should plan
for the project’s financial feasibility for the longer period. The PJ may not use
HOME-ARP funds to provide operating assistance, including a capitalized operating
reserve, to cover deficits during the minimum or an extended compliance period.
The PJ must amend the use restriction for HOME-ARP NCS to reflect the
conversion to permanent affordable housing. The provisions for imposing
affordability requirements at 24 CFR 92.252(e)(1) through (e)(4) apply to the
amended use restriction. In addition, the amended use restriction for the permanent
affordable housing must be enforceable to maintain compliance with the
requirements of this Notice for the minimum compliance period, including the
following:
(1)The same number of units that were operated as HOME-ARP NCS for
qualifying populations must be restricted for and must be occupied by
households that meet the definition of a qualifying population at the time
of initial occupancy of the permanent affordable housing. The
household’s contribution toward rent during this period must be
affordable in accordance with Section VI.E.11 of this Notice.
(2)The units must comply with the ongoing property condition standards of
24 CFR 92.251(f) throughout the minimum compliance period as
demonstrated by an on-site inspection within 12 months of project
completion and an on-site inspection at least once every three years
thereafter as required by 24 CFR 92.504(d)(ii).
(3)Each household that occupies a HOME-ARP assisted rental unit must
have an executed lease that complies with the tenant protections required
in Section VI.B.18 of this Notice.
iii.Property Standards: For the remaining restricted use period, the PJ must require that
project owners maintain the housing as decent, safe and sanitary housing in good
repair in accordance with the ongoing property condition standards of 24 CFR
92.251(f) as demonstrated by an on-site inspection at least once every three years in
accordance with 24 CFR 92.504(d)(ii).
iv.Tenant Contribution to Rent: The PJ must confirm that the qualifying household’s
contribution to rent is affordable to the household based on a determination of the
household’s income. If the household is receiving project-based or tenant-based
rental assistance, it cannot contribute towards rent more than is permitted in
accordance with the requirements of the applicable program. If a qualifying
household cannot contribute to rent, or the contribution is insufficient to cover the
unit rent, the PJ may provide HOME-ARP TBRA or supportive services to assist the
qualifying household but may not provide operating cost assistance or fund an
operating cost assistance reserve.
v.Tenant Protections: Following conversion, each qualifying household that occupies
a permanent affordable housing unit must have an executed lease or sublease that
complies with the tenant protections requirements of this Notice.
(1)Lease Requirement: There must be a lease between the qualifying household
and the owner of the permanent affordable housing project or, if there is a
sublease with a qualifying household, a lease between a HOME-ARP
sponsor and the owner in accordance with 24 CFR 92.253(a).
(2)Prohibited Lease Terms: The lease between the qualifying household and
the owner, lease between HOME-ARP sponsor and the owner, and sublease
between a HOME-ARP sponsor and qualifying household may not contain
any of the prohibited lease terms specified in 24 CFR 92.253(b).
(3)Termination of tenancy: An owner may not terminate the tenancy or refuse
to renew the lease of a qualifying household (or of a HOME-ARP sponsor
with a sublease with a qualifying household) in a permanent affordable
housing unit except for serious or repeated violation of the terms and
conditions of the lease; for violation of applicable Federal, State, or local
laws, or for other good cause. An increase in the qualifying household’s
income does not constitute good cause.
To terminate or refuse to renew tenancy, the owner must serve written notice
upon the qualifying household and the HOME-ARP sponsor if the lease is
between an owner and HOME-ARP sponsor, specifying the grounds for the
action at least 30 days before termination of tenancy. In the case of a
sublease, to terminate or refuse to renew tenancy of a qualifying household,
the HOME-ARP sponsor, in accordance with the policy established by the
PJ, must notify the PJ in advance of serving written notice to the qualifying
household and must serve written notice upon the qualifying household at
least 30 days before termination of tenancy, specifying the grounds for the
action.
vi.Coordinated Entry and Project-Specific Waitlists: On a project-by-project basis, the
PJ must use the method of tenant selection in Section VI.B.19 of this Notice to select
qualifying households for occupancy of permanent affordable housing.
vii.Penalties for Noncompliance: The PJ must repay HOME-ARP funds invested in
HOME-ARP NCS that was converted to permanent affordable housing if the
permanent affordable housing does not comply with initial or ongoing requirements
of this Notice during the compliance period.
c.CoC Permanent Housing: During the HOME-ARP NCS restricted use period but only
after the HOME-ARP NCS minimum use period, a PJ may permit the conversion of a
HOME-ARP NCS project to permanent housing or permanent supportive housing under
24 CFR 578.43 (acquisition) and/or 24 CFR 578.45 (rehabilitation) of the CoC program
regulations. Conversions may only occur in accordance with the requirements
prescribed in the PJ’s written agreement with the HOME-ARP NCS owner. If
conversion is approved by the PJ, the HOME-ARP NCS use restrictions must remain in
place until the project is approved for CoC funding and the required CoC restrictions are
imposed on the property.
Conversion to CoC permanent housing or permanent supportive housing may serve the
following eligible households as defined in 24 CFR 578.3, subject to any further
eligibility conditions that may apply to the use of CoC Program funds to provide rental
assistance in the housing or otherwise support the project:
Chronically homeless individuals
Homeless individuals or families
PJs are prohibited from investing additional HOME-ARP funds to pay for the cost of
converting the project to CoC permanent housing or permanent supportive housing. The
CoC designates eligible applicants for grant funds under 24 CFR Part 578, which
includes nonprofit organizations, States, local governments, and instrumentalities of
State or local governments. For-profit entities are not eligible to apply for CoC grants or
to be subrecipients of grant funds. Consequently, if a HOME-ARP NCS project owner
intends to convert the project to CoC permanent housing or permanent supportive
housing during the restricted use period, the PJ is encouraged to pursue partnership and
leveraging opportunities with the CoC early in the planning stage of a HOME-ARP NCS
project. Additionally, PJs may provide supportive services or HOME-ARP TBRA
to qualifying households that must move because of the conversion. (See Section
VII.F.4.b for more information on relocations involving shelter occupants).
F.Nonprofit Operating and Capacity Building Assistance
A PJ may use up to 5 percent of its HOME-ARP allocation to pay operating expenses of
CHDOs and other nonprofit organizations that will carry out activities with HOME-ARP funds.
A PJ may also use up to an additional 5 percent of its allocation to pay eligible costs related to
developing the capacity of eligible nonprofit organizations to successfully carry out HOME-
ARP eligible activities.
PJs may award operating expense assistance or capacity building assistance to a nonprofit
organization if it reasonably expects to provide HOME-ARP funds to the organization for any
of the eligible HOME-ARP activities within 24 months of the award.
1.Eligible Costs
a.Operating Expense Assistance: Operating expenses are defined as reasonable and
necessary costs of operating the nonprofit organization. These costs
include employee salaries, wages and other employee compensation and
benefits; employee education, training, and travel; rent; utilities; communication costs;
taxes; insurance; equipment, materials, and supplies.
HOME-ARP funds used for operating expenses must be used for the “general
operating costs” of the nonprofit organization. These operating costs must not have a
particular final cost objective, such as a project or activity, or must not be directly
assignable to a HOME-ARP activity or project. For example, HOME-ARP funds for
operating expenses may not be used for staffing costs to provide supportive services or
develop HOME-ARP-rental housing (as operating costs to develop HOME-ARP rental
housing are paid for by a developer fee which is a project delivery or soft cost). Because
ARP does not permit any HOME-ARP funds to be used to operate a shelter, all costs
related to operating a non-congregate shelter (e.g., allocable overhead and staffing costs,
insurance, utilities) also cannot be paid with HOME-ARP funds.
The actual costs of implementing a specific activity or project, including staff costs to
deliver supportive services or administer HOME-ARP TBRA, are considered HOME-
ARP project delivery costs or project soft costs and are not eligible costs under
Nonprofit Operating and Capacity Building Assistance. HOME-ARP project delivery
costs are those allowable costs incurred for implementing and carrying out eligible
HOME-ARP projects or activities, such as supportive services. All project delivery costs
are allocable to a HOME-ARP project, including direct project and related delivery costs
integral to developing the project or providing the activity. HOME-ARP project delivery
costs may be paid, if eligible, by HOME-ARP funds provided under a written agreement
for the activity or project and must not be paid with nonprofit operating expense or
capacity building assistance.
b.Capacity Building Assistance: Capacity building expenses are defined as reasonable and
necessary general operating costs that will result in expansion or improvement of an
organization’s ability to successfully carry out eligible HOME-ARP activities. Eligible
costs include salaries for new hires including wages and other employee compensation
and benefits; costs related to employee training or other staff development that enhances
an employee’s skill set and expertise; equipment (e.g., computer software or programs
that improve organizational processes), upgrades to materials and equipment, and
supplies; and contracts for technical assistance or for consultants with expertise related
to the HOME-ARP qualifying populations.
2.Limitations on Assistance: NAHA and the HOME regulations limit the amount of
operating expense assistance that an organization can receive annually. ARP extends this
limitation to the capacity building assistance paid with HOME-ARP funds.
In any fiscal year, operating assistance provided to a nonprofit organization may not exceed
the greater of 50 percent of the general operating expenses of the organization, as described
above, for that fiscal year or $50,000.
In any fiscal year, capacity building assistance provided to a nonprofit organization may not
exceed the greater of 50 percent of the general operating expenses of the organization, as
described above, or $50,000.
If an organization receives both operating assistance and capacity building assistance in any
fiscal year, the aggregate total amount of assistance it may receive is the greater of 50
percent of the organization’s total operating expenses for that fiscal year or $75,000.
To implement the above limitations on assistance, HUD has established separate fund types
in IDIS for operating expense assistance and capacity building assistance. This will
facilitate accurate tracking and ensure that PJs do not exceed the limits established in
NAHA and ARP.
3.Commitment of Operating Expense and Capacity Building Assistance: A PJ commits
operating expense assistance or capacity building assistance when it enters into a legally
binding agreement with the nonprofit organization to provide the assistance.
VII.OTHER FEDERAL REQUIREMENTS
HOME-ARP funds are federal financial assistance and, therefore, are subject to requirements
applicable to such funds. PJs must comply with the following requirements: 24 CFR part 92,
subpart H, 92.352 – Environmental review; 92.353 – Displacement, relocation, and acquisition;
and 92.355 – Lead-based paint.
A.Other Federal Requirements and Nondiscrimination
The requirements in 24 CFR 92.350 apply to the HOME-ARP program. PJs must comply with
the Federal requirements set forth in 24 CFR part 5, subpart A, including: nondiscrimination
and equal opportunity; disclosure requirements; debarred, suspended or ineligible contractors;
drug-free work; and housing counseling and the nondiscrimination requirements at section 282
of NAHA. The requirements in section 282 of NAHA are waived in connection with the use of
HOME-ARP funds on lands set aside under the Hawaiian Homes Commission Act, 1920 (42
Stat. 108). PJs must also comply with the Violence Against Women Act (VAWA) requirements
set forth in 24 CFR 92.359.
B.Affirmative Marketing and Minority Outreach
The requirements in 24 CFR 92.351 apply to HOME-ARP activities.
C.National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321) and
Related Laws
The environmental requirements in 24 CFR 92.352 apply to eligible activities under this Notice.
The environmental effects of each activity carried out with HOME-ARP funds must be assessed
in accordance with the provisions of NEPA and the related authorities listed in HUD's
implementing regulations at 24 CFR part 58. The applicability of the provisions of 24 CFR part
58 is based on the HOME-ARP project as a whole (i.e., all individual project activities, such as
acquisition and rehabilitation, aggregated according to the requirements at 24 CFR 58.32), not
on the type of the cost paid with HOME-ARP funds. In accordance with the provisions in 24
CFR part 58, activities undertaken with HOME-ARP funds are subject to environmental review
by a PJ or State recipient. The PJ or State recipient (referred to as the “Responsible Entity” or
“RE”) must assume responsibility for environmental review, decision making, and action for
each activity that it carries out with HOME-ARP funds, in accordance with the requirements at
24 CFR Part 58. A state PJ must assume responsibility for approval of Requests for Release of
Funds and Certification (RROF/C) submitted by State recipients.
No funds may be committed to a HOME-ARP activity or project before the completion of the
environmental review and approval of the RROF/C, as applicable. Neither a HOME-ARP
recipient nor any participant in the development process, including public or private nonprofit
or for-profit entities, or any of their contractors, may commit HUD assistance on an activity or
project until the environmental review has been completed and HUD or the state has approved
the recipient's RROF/C from the RE as applicable. In addition, until the RROF/C have been
approved, neither a HOME-ARP recipient nor any participant in the development process may
commit non-HUD funds on or undertake a HOME-ARP activity or project if the activity or
project would have an adverse environmental impact or limit the choice of reasonable
alternatives. Therefore, it is important for REs to begin and complete any required
environmental reviews as soon as possible.
1.HOME-ARP TBRA and Supportive Services
HOME-ARP TBRA and supportive services as defined at 24 CFR 58.35(b) are categorically
excluded, not subject to the Federal laws and authorities at 24 CFR 58.5 (CENST) or exempt
from review under NEPA. A RE may complete a single CENST review categorized under 24
CFR 58.35(b) for their supportive services program or their HOME-ARP TBRA program where
participants choose their own unit and are not restricted to units within a pre-determined
specific project site or sites. There is no need to complete reviews for every unit selected by
participants.
2.HOME-ARP Rental Housing
Acquisition of a structure to be used as HOME-ARP rental housing is categorically excluded,
subject to the Federal laws and authorities referenced at 24 CFR 58.5 (CEST) under 24 CFR
58.35(a)(5) (with the possibility of converting to exempt under 24 CFR 58.34(a)(12)) if the
structure acquired will be retained for the same use (e.g., residential). Rehabilitation of
buildings for residential use with one to four units for HOME-ARP rental housing is CEST
under 24 CFR 58.35(a)(3)(i), if the density is not increased beyond four units, and the land use
is not changed. Rehabilitation of buildings for use as HOME-ARP multifamily rental housing
is CEST under 24 CFR 58.35(a)(3)(ii) only if:
1.the unit density is not changed more than 20 percent;
2.the project does not involve changes in land use from residential to non-residential; and
3.the estimated cost of rehabilitation is less than 75 percent of the total estimated cost of
replacement after rehabilitation.
Rehabilitation for HOME-ARP rental housing that does not meet the thresholds for multifamily
residential buildings listed above requires completion of an Environmental Assessment in
accordance with 24 CFR Part 58, Subpart E. An Environmental Assessment is also required for
new construction, demolition, acquisition of vacant land for new construction, and acquisition of
non-residential structures for demolition and new construction.
3. HOME-ARP NCS
HOME-ARP NCS activities are subject to environmental review by the RE under 24 CFR part
58. Acquisition of a structure to be used as HOME-ARP NCS is CEST under 24 CFR
58.35(a)(5) (with the possibility of converting to exempt under 24 CFR 58.34(a)(12)) if the
structure acquired will be retained for the same use (e.g., residential). Rehabilitation of a
structure for HOME-ARP NCS is CEST if the project meets the thresholds listed at 24 CFR
58.35(a)(3)(i) or (ii). Rehabilitation that does not meet these thresholds requires completion of
an Environmental Assessment pursuant to 24 CFR part 58, subpart E. An Environmental
Assessment is also required for new construction, demolition, acquisition of vacant land for new
construction, and acquisition of non-residential structures for demolition and new construction.
HOME-ARP NCS projects which may convert to emergency shelter or permanent housing
pursuant to Sec. 3204(a)(4)(B) or (C) of the ARP may complete a single environmental review
that covers all proposed HUD funding sources and project activities. Conversion to a program
using project-based rental assistance is CEST and requires completion of an environmental
review. If conversion or other additional HUD funding sources are proposed after the
environmental review has been completed, a CENST review for supplemental assistance under
24 CFR 58.35(b)(7) can be performed if the review is completed by the same RE that conducted
the original review and if re-evaluation is not required by 24 CFR 58.47.
The PJ or subrecipient, or any contractor of the PJ or subrecipient, may not acquire, rehabilitate,
convert, repair, dispose of, demolish, or construct property for a HOME-ARP NCS project, or
commit or expend HUD or non-HUD funds for NCS under HOME-ARP, until the RE has
completed an environmental review under 24 CFR part 58 and received HUD or state approval
of the RROF/C, as applicable.
D.Labor Standards
The requirements in 24 CFR 92.354 apply to HOME-ARP activities.
E.Lead Hazard Control Requirements
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 24 CFR Part 35, subparts A, B, J, K, M, and R apply to HOME-ARP-assisted
activities.
For HOME-ARP NCS, a project must comply with 24 CFR part 35, Subpart K when the
HOME-ARP activity is acquisition only. HOME-ARP NCS projects that involve rehabilitation
of pre-1978 facilities, whether the rehabilitation is funded with HOME-ARP or other funds,
must comply with the requirements of 24 CFR part 35, Subpart J.
F.Uniform Relocation Assistance and Real Property Acquisition Policies
Act, Section 104(d), and HOME-ARP Displacement, Relocation and
Acquisition Program Requirements
HOME-ARP funding is subject to the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970 and section 104(d) of the Housing and Community
Development Act of 1974, in addition to the Displacement, Relocation and Acquisition
regulatory requirements of 24 CFR 92.353. This Notice also includes HOME-ARP program
specific relocation requirements applicable to HOME-ARP-assisted projects. PJs must comply
with all applicable requirements, as described in this section.
1.Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970:
Costs incurred to comply with the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, as amended, (42 U.S.C. § 4601 et seq.) (URA) are eligible
HOME-ARP project costs pursuant to this Notice and 24 CFR 92.206(f). The URA
establishes minimum requirements for the acquisition of real property and the displacement
of persons from their homes, businesses, or farms as a direct result of acquisition,
rehabilitation, or demolition for federally-assisted programs and projects. The URA
implementing regulations at 49 CFR part 24 establish:
Requirements for the provision of replacement housing assistance, advisory services,
and moving costs to persons displaced as a result of a program or project that receives
federal financial assistance;
Requirements for acquisitions, including the payment of just compensation pursuant to
49 CFR part 24, subpart B, and provisions for voluntary acquisitions set forth in 49 CFR
24.101.
Minimum requirements for temporary relocation of persons, businesses, or farms as a
result of a project or program that receives federal financial assistance. These
requirements are found in Appendix A, Section 24.2(a)(9)(ii)(D).
Additional HUD URA policy and guidance is available in HUD Handbook 1378.
2.Section 104(d) of the Housing and Community Development Act of 1974: HOME-ARP
is HOME funding and subject to the requirements in section 104(d) of the Housing and
Community Development Act of 1974, as amended, (42 USC § 5304(d)), (“section 104(d)”)
unless waived, as described in this section and Appendix. Costs incurred to comply with
section 104(d) requirements are eligible HOME-ARP project costs under 24 CFR 92.206(f).
section 104(d) applies to the demolition or conversion, as defined in 24 CFR 42.305, of a
lower-income dwelling unit in connection with a HOME or Community Development Block
Grant Program (CDBG) assisted activity. section 104(d) includes the following
requirements:
A PJ must have a residential anti-displacement and relocation assistance
plan (RARAP);
A PJ must provide relocation assistance to displaced lower-income persons; and
A PJ must perform one-for-one replacement of lower-income dwellings demolished or
converted to a use other than a lower-income dwelling unit. A lower-income dwelling
unit is defined in 24 CFR 42.305 as a dwelling unit with a market rent (including utility
costs) that does not exceed the applicable Fair Market Rent (FMR) for existing housing,
as defined by HUD.
Section 104(d) implementing federal regulations can be found at 24 CFR part 42 Subpart C.
HOME-ARP Section 104(d) Waiver / One-for-One Replacement Housing.
For purposes of , the one-for-one replacement housing requirements of section
104(d)(2)(A)(i) and (ii) and (d)(3) (42 U.S.C. 5304(d)(2)(A)(i) and (ii) and 42 U.S.C.
5304(d)(3)) and 24 CFR 42.375, lower-income dwelling units shall not include single-room
occupancy (SRO) units or residential hotel or motel units in jurisdictions where those units
are considered dwelling units under state or local law. All other section 104(d)
requirements, including but not limited to the requirement that the PJ have and follow a
RARAP, remain in effect. (See 24 CFR 92.353(e) and 24 CFR part 42, subpart C).
3.HOME Program Displacement, Relocation and Acquisition Regulations: In addition to
the URA and section 104(d) requirement described above, the HOME program’s
Displacement, Relocation and Acquisition regulations at 24 CFR 92.353 also apply
to projects funded with HOME-ARP funds. Some of these requirements differ from those
of the URA and section 104(d), including but not limited to the expanded temporary
relocation protections at 24 CFR 92.353(b) and (c); optional relocation assistance policies in
24 CFR 92.353(d); and the right to return to a building or complex, if feasible, upon
completion of a HOME project, in accordance with 24 CFR 92.353(a). PJs must
follow these program-specific requirements in HOME-ARP assisted projects.
PJs are encouraged to develop optional relocation policies to address individuals that may
not be eligible for URA or section 104(d) assistance due to their length of occupancy in a
unit, ineligibility of their dwelling unit, or other factors beyond their control. Such policies
must be in writing, applied consistently, and must not violate any other federal law or
regulation. Costs incurred to comply with 24 CFR 92.353, including optional relocation
policies, are eligible HOME-ARP project costs under 24 CFR 92.206(f).
4.Additional HOME-ARP Program Relocation Related Requirements: The
following additional HOME-ARP program relocation requirements apply:
a.Acquisition and/or rehabilitation of hotels, motels and other non-residential
property: In states where hotels and motels are not considered dwelling units or
residential property, the acquisition of non-residential property such as hotels and motels
for the production of HOME-ARP NCS units or HOME-ARP rental housing will not
make a person occupying those properties eligible for relocation assistance under the
URA, section 104(d) or 24 CFR 92.353. HOME PJs may provide HOME-ARP
assistance, as defined by this Notice, including the provision of HOME-ARP supportive
services, HOME-ARP TBRA, the ability to stay in HOME-ARP NCS units, or the
ability to rent a HOME-ARP rental unit, if the individuals or families can
demonstrate that–
i.they have been in continuous residence at the property for 30 or more calendar
days, and
ii.they are a qualifying household, as defined by this Notice.
Any assistance provided pursuant to this section may be provided without regard to any
preferences, project-specific waiting lists, or any other form of prioritization the PJ has
developed pursuant to this Notice. For purposes of HOME-ARP, costs associated with
activities under this provision of the Notice may be charged as either project delivery
costs or relocation costs eligible under 24 CFR 92.206(f).
b.Conversion of HOME-ARP NCS: If HOME-ARP NCS units are occupied and converted
to either permanent housing under CoC or permanent affordable housing as described in
Section VI.E.11 of this Notice, persons occupying the shelter would not normally be
eligible for relocation assistance under the URA, section 104(d) or 24 CFR
92.353 because they are not displaced from a dwelling unit. However, since the
individuals or families occupying such shelter units are already qualifying households
under HOME-ARP, HOME PJs may immediately provide such occupants with HOME-
ARP assistance, as defined by this Notice, including the provision of HOME-ARP
supportive services, HOME-ARP TBRA, the ability to stay in other HOME-ARP
NCS units, or the ability to rent a HOME-ARP rental unit. Additionally, the PJ may
provide the occupants with assistance for moving costs or advisory services, as
appropriate, as HOME-ARP administrative costs or under the HOME-ARP supportive
services activity in Section VI.D of this Notice. Any assistance provided pursuant to this
section may be provided without regard to any preferences, project-specific waiting lists,
or any other form of prioritization the PJ has developed pursuant to this Notice, as
the persons occupying the NCS units were already determined to be qualifying
households under the HOME-ARP.
5.Persons Ineligible for HOME-ARP Assistance and Ineligible for URA, Section
104(d), or assistance pursuant to 24 CFR 92.353: If a person is required to move as a
direct result of a HOME-ARP project and is determined ineligible for HOME-ARP housing
assistance under the preceding Section VII.F.4 and also determined ineligible as a displaced
person under the URA, section 104(d) or HOME program rules, the PJ may provide such
persons advisory services as an eligible HOME-ARP administrative cost, as
the PJ determines to be reasonable and necessary.
G.Section 3 Economic Opportunities for Low- and Very Low-Income
Persons
Section 3 requirements established at 24 CFR Part 75 apply to HOME-ARP-assisted projects.
H.Conflicts of Interest
HOME-ARP is subject to the following conflicts of interest requirements:
1.Conflicts of Interest: PJs, State recipients, and subrecipients engaging in any of the
activities defined this Notice shall be subject to the conflicts of interest provisions at 24
CFR 92.356, including but not limited to the conflicts of interest exception process defined
in 24 CFR 92.356(d)-(e). Owners and developers of HOME-ARP NCS and HOME-ARP
rental housing shall be subject to 24 CFR 92.356(f).
2.Organizational Conflicts of Interest: The provision of any type or amount of HOME-
ARP TBRA or supportive services may not be conditioned on an individual’s or family's
acceptance or occupancy of a shelter or housing unit owned by the PJ; State recipients; the
subrecipient; or a parent, affiliate, or subsidiary of the subrecipient. No subrecipient may,
with respect to individuals or families occupying housing owned by the subrecipient, or any
parent, affiliate, or subsidiary of the subrecipient, administer financial assistance that
includes rental payments, utility deposits, security deposits, or first and last month’s rent
provided pursuant to this Notice. All contractors of the PJ, State recipients, or subrecipient
must comply with the same requirements that apply to subrecipients under this section.
3.Written Standards of Conduct: PJs, State recipients, and subrecipients must maintain
written standards of conduct covering the conflicts of interest and organizational conflicts of
interest requirements under this Notice and 2 CFR 200.318. The written standards of
conduct must also provide for internal controls and procedures to require a fair and open
selection process for awarding HOME-ARP funds pursuant to this Notice. These standards
must include provisions on if and how Continuum of Care board members may participate
in and/or influence discussions or resulting decisions concerning the competition or
selection of an award or other financial benefits made pursuant to the HOME-ARP Notice,
including internal controls on when funds may be awarded to the organization that the
member represents.
4.Requesting Exceptions to Organizational Conflicts of Interest: Any request for an
exception to the organizational conflicts of interest provisions in this Notice shall be in
writing and shall be considered by HUD only after the PJ or State recipient has provided the
following:
a.A written 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
b.An opinion of the PJ’s or State recipient's attorney that the interest for which the
exception is sought would not violate State or local law.
5.Granting Exceptions to Organizational Conflicts of Interest: HUD shall determine
whether to grant an exception to the organizational conflicts of interest on a case-by-case
basis when it determines that the exception will serve to further the purposes of HOME-
ARP. HUD shall consider the following factors, as applicable, in determining whether to
grant such an exception:
c.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
d.Whether undue hardship will result to the PJ, State recipient, subrecipient or the person
affected when weighed against the public interest served by avoiding the prohibited
conflict;
e.Whether conditioning approval on changes to the PJ, State recipient, or subrecipient’s
policies or procedures can adequately address the organizational conflict of interest; and
f.Any other factors relevant to HUD’s determination, including the timing of the
requested exception.
VIII.PROGRAM ADMINISTRATION
A.PJ Responsibilities
The PJ is responsible for managing the day-to-day operations of its HOME-ARP program,
ensuring that HOME-ARP 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 PJ of this responsibility.
B.Written Agreement Requirements
Before disbursing any HOME-ARP funds to any entity, the PJ must enter into a written
agreement with that entity pursuant to 24 CFR 92.504. Similarly, before disbursing any HOME
funds to a State recipient, subrecipient, or contractor which is administering all or a part of the
HOME-ARP program on behalf of the PJ, the PJ must also enter into a written agreement with
that entity that complies with 24 CFR 92.504 and the requirements described below. A written
agreement cannot commit to providing HOME-ARP funds after the end of the HOME-ARP
budget period.
The written agreement must require compliance with the requirements of this Notice. The
content of the written agreement will vary depending upon the role the entity is asked to assume
or the type of project undertaken.
This section details basic requirements by activity and the minimum provisions, in addition to
those at 24 CFR 92.504 that must be included in a written agreement. The written agreement
provisions in 24 CFR 92.504 that reference the requirements of 24 CFR 92.350, 24 CFR 92.351,
and 24 CFR 92.359 are not waived and apply for all HOME-ARP written agreements.
1.Rental Housing: The PJ must execute a written agreement with the project
owner/developer prior to the expenditure of HOME-ARP funds. The written agreement
must comply with 24 CFR 92.504 and contain the following additional provisions:
a.Use of HOME-ARP funds for Rental Housing: The agreement between the
owner/developer must describe the address of the project or legal description of the
property if a street address has not be assigned to the property, the use of the HOME-
ARP funds and other funds for the project, including the tasks to be performed for the
project, a schedule for completing the tasks and the project, and a complete budget,
including any HOME-ARP funds used to capitalize an operating cost reserve for
qualified HOME-ARP units. These items must be in sufficient detail to provide a sound
basis for the PJ to effectively monitor performance under the agreement to achieve
project completion and compliance with HOME-ARP requirements.
b.Operating Cost Assistance: If the PJ will provide HOME-ARP funds for operating cost
assistance, the agreement must specify whether the PJ will provide assistance through
periodic payments or capitalize the operating cost assistance reserve based on the
operating deficit projected for the 15-year compliance period. If the PJ is providing
ongoing assistance, the amount of assistance must be based on the actual operating
deficit associated with the HOME-ARP units restricted for occupancy by qualifying
households. The written agreement must specify the frequency of operating assistance
payments made to the owner (e.g., monthly, quarterly, etc.) and state that the amount of
assistance will be equal to the deficit demonstrated and/or incurred. The written
agreement may only provide for HOME-ARP funds to be used for operating assistance
payments during the budget period defined in Section VIII.C.4 below. If operating cost
assistance will be required beyond the budget period, the PJ should capitalize an
operating reserve before the expiration of the budget period for HOME-ARP funds in
accordance with Section VI.B.23. If the PJ is capitalizing the operating reserve for the
15-year HOME-ARP compliance period, the amount of assistance must be based on the
project’s underwriting and the total anticipated operating deficit associated with the
HOME-ARP units restricted for occupancy by qualifying households. The written
agreement must specify the amount of the capitalized reserve and the restrictions on its
use during the minimum compliance period in Section VI.B.18. Net operating income
resulting from HOME-ARP operating cost assistance is not permitted and must be
prohibited in the written agreement between the participating jurisdiction and the owner.
c.Sublease/Master Lease of HOME-ARP Units: If the PJ will permit a project owner to
execute a sublease or master lease with a nonprofit organization for HOME-ARP units
restricted for occupancy by qualifying households, the agreement must specify the
duration of the sublease or master lease, applicable rents, lease requirements and tenant
protections.
d.On-going compliance: The agreement must require rental housing assisted with HOME-
ARP funds to comply with the on-going requirements of Section VI.B of this Notice or
require repayment in accordance with Section VI.B.22.
e.Property Standards: The agreement must require the housing to meet the property
standards required in 24 CFR 92.251 paragraphs (a) new construction, (b) rehabilitation
projects, (c)(1) and (2) acquisition of standard housing and (f) on-going property
condition standards.
f.Records and reports: The agreement must specify the particular records that must be
maintained and the information or reports that must be submitted to assist the PJ in
meeting its recordkeeping and reporting requirements. The owner/developer of rental
housing must annually provide the PJ with information on rents and occupancy of
HOME-ARP assisted units to demonstrate compliance with this Notice. If the rental
project has floating HOME-ARP units, the project owner/developer must provide the PJ
with information regarding unit substitution and filling vacancies so that the project
remains in compliance with the HOME-ARP occupancy requirements. The agreement
must specify the reporting requirements, (including copies of financial statements) to
enable the PJ to determine the financial condition and continued financial viability of the
project.
g.Enforcement of the agreement: The agreement must provide for a means for the PJ to
enforce compliance with HOME-ARP requirements. This means of enforcement may
include liens, deed restrictions, covenants running with the land, use restriction, or other
mechanism approved by HUD under which the PJ has the right to require specific
performance. In addition, the agreement must specify remedies for breach of the
provisions of the agreement.
h.Request for disbursement of funds: The agreement must specify that the
owner/developer may not request disbursement of funds under the agreement until the
funds are needed for payment of eligible costs. The owner/developer may request
capitalization of a project operating cost assistance reserve for the qualifying units once
all necessary title transfer requirements and construction work have been performed.
The amount of each request must be limited to eligible costs in the amount needed, as
described in Section VI.B.5.g.
i.Duration of the agreement: The agreement must be in effect for at least the 15-year
HOME-ARP minimum compliance period.
j.On-site Inspections and Financial Oversight: The PJ must comply with the on-site
inspections and financial oversight requirements of 24 CFR 92.504(d)(1) and (2). In
addition, if the PJ will permit the capitalization of a project operating cost assistance
reserve, the PJ must, no less than annually, oversee the administration of the operating
cost assistance reserve account to verify that the account is appropriately sized and
draws from the account are used to cover any deficits associated with units occupied by
qualifying households.
k.Tenant Selection: The written agreement must contain provisions explaining the method
of tenant selection to be used in accordance with the requirements of Section IV.C and
VI.B.20 of this Notice. This section must be in sufficient detail to determine which
method of tenant selection is being used for the qualifying population (i.e., use of CE,
use of CE with other referral methods, or project-specific waiting list), the method of
tenant selection for low-income households (See Section VI.B.20.b and 24 CFR
92.253(d)), and any required policies and procedures around the use of a CE or project-
specific waiting list. This section must also be in sufficient detail to determine
compliance with the PJ’s preferences and/or method of prioritization, if any, as well as
all applicable fair housing, civil rights, and nondiscrimination requirements, including
but not limited to those requirements listed in 24 CFR 5.105(a).
2.TBRA (subrecipient or contractor): The requirements at 24 CFR 92.504, apply to the use
of HOME-ARP funds for TBRA. The written agreement provisions in 24 CFR 92.504 that
reference the requirements of 24 CFR 92.350, 24 CFR 92.351, and 24 CFR 92.359 are not
waived and still apply for HOME-ARP written agreements. The written agreement must
contain the following provisions:
a.Use of HOME ARP funds: At a minimum, the written agreement must describe the
amount and use of the HOME-ARP funds, the tasks to be performed, or services to be
provided. HOME-ARP funds cannot be provided after the end of the HOME-ARP
budget period.
b.Records and reports: The agreement must specify the particular records that must be
maintained and the information or reports that must be submitted to assist the PJ in
meeting its recordkeeping and reporting requirements.
c.Duration of agreement and disbursement of funds: The agreement must specify the
duration of the agreement and state that disbursement of funds under the agreement may
not be requested until the funds are needed.
d.Compliance with HOME-ARP program requirements: The written agreement must
require compliance with HOME-ARP program requirements for the HOME-ARP TBRA
activity as outlined in Section VI.C of this Notice.
e.Rental assistance contract: There must be a rental assistance contract between the PJ
and either the HOME-ARP sponsor, the HOME-ARP TBRA assisted household, or the
property owner. The PJ must determine the terms of the rental assistance contract. The
rental assistance contract continues until the lease is terminated. If the rental assistance
is being provided through a HOME-ARP sponsor, the PJ must determine the term of the
rental assistance contract between the PJ and HOME-ARP sponsor.
If HOME-ARP TBRA is provided in coordination with a HOME-ARP sponsor, the PJ
must enter into a written agreement with the HOME-ARP sponsor if the HOME-ARP
TBRA rental assistance contract is not with the HOME-ARP sponsor and the HOME-
ARP sponsor will be receiving the HOME-ARP TBRA subsidy directly from the PJ.
The written agreement must specify the requirements for the HOME-ARP sponsor
receiving the TBRA subsidy on behalf of the HOME-ARP TBRA household and the
HOME-ARP sponsor’s obligation to use the HOME-ARP TBRA payment to pay rent
for the unit to the property owner or management agent. If HOME-ARP TBRA is
provided in coordination with a HOME-ARP sponsor, the sponsor must enter into a
sublease with the HOME-ARP TBRA assisted household that must specify the duration
of the sublease, applicable rents, lease requirements and tenant protections, all in
accordance with the requirements of this Notice.
f.Tenant Selection: The written agreement must require the owner to comply with the
method of tenant selection determined by the PJ and applicable requirements of Section
IV.C and VI.C.1 of this Notice. The written agreement must include a description of the
required method of tenant selection for the qualifying populations (i.e., use of CE, use of
CE with other referral methods, project-specific waiting list), the method of tenant
selection for low-income households (See Section VI.B.20.b and 24 CFR 92.253(d)),
and any required policies and procedures around the use of a CE or project-specific
waiting list. This section of the written agreement must be in sufficient detail to
determine compliance with the PJ’s preferences and/or method of prioritization, if any,
as well as all applicable fair housing, civil rights, and nondiscrimination requirements,
including but not limited to those requirements listed in 24 CFR 5.105(a).
3.Supportive Services (subrecipient or contractor): The requirements at 24 CFR 92.504,
apply to the use of HOME-ARP funds for supportive services. The provisions of the written
agreement will depend on the role the entity is asked to assume. At a minimum, the written
agreement must contain the following provisions:
a.Use of HOME funds: The written agreement must describe the amount and uses of the
HOME-ARP funds, the tasks to be performed, the services to be provided, and include a
budget. The written agreement cannot agree to provide HOME-ARP funds after the end
of the HOME-ARP budget period.
b.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 PJ
in meeting its recordkeeping and reporting requirements as required under Section
VIII.F of this Notice.
c.Duration of the agreement and Disbursement of Funds: The agreement must specify the
duration of the agreement, and state that disbursement of funds under the agreement may
not be requested until the funds are needed.
d.Compliance with HOME-ARP Program Requirements: The written agreement must also
require compliance with HOME-ARP program requirements for the HOME-ARP
supportive services activity as described in Section VI.D of this Notice.
4.HOME-ARP Non-Congregate Shelter (owner/developer): Written agreements must be
executed between the PJ and the owner for all HOME-ARP NCS projects. A legally
binding HOME-ARP NCS written agreement must include the date of the signature of each
person signing the agreement. PJs are responsible for entering into written agreements
before disbursing HOME-ARP funding. Contents of written agreements can vary based on
specific needs of the PJ, the owner, and the project. Agreements for the acquisition,
development, and rehabilitation of HOME-ARP NCS units must contain the following
provisions:
a.Use of HOME-ARP funds: The agreement between the PJ and owner must include the
address of the project or legal description of the property if a street address has not been
assigned to the property, the use of the HOME-ARP NCS funds and other funds for the
project, including the tasks to be performed for the project, a schedule for completing
the tasks and the project, and a complete budget. These items must be in sufficient
detail to provide a sound basis for the PJ to effectively monitor performance under the
agreement to achieve project completion and compliance with HOME-ARP
requirements. The written agreement cannot agree to provide HOME-ARP funds after
the end of the HOME-ARP budget period.
b.Habitability and Property Standards: The agreement must require the HOME-ARP
NCS project to meet the habitability and property standards as described in Section
VI.E.7 of this Notice based on the type of project completed.
c.Project Requirements: The agreement must require the HOME-ARP NCS project to
meet the project requirements as described in this Notice.
d.Other program requirements: The agreement must require the PJ and owner to carry out
the project in compliance with the other Federal requirements of 24 CFR 92 subpart H
and 24 CFR 92.505.
e.Records and reports: The agreement must specify the particular records that must be
maintained and the information or reports that must be submitted to assist the PJ in
meeting its recordkeeping and reporting requirements.
f.Restricted Use Period: The agreement must require the project to meet the Restricted
Use Period as described in Section VI.E.9 of this Notice based on project type.
g.Enforcement of the agreement: The agreement must provide for a means for the PJ to
enforce compliance with HOME-ARP requirements. This means of enforcement may
include liens, deed restrictions, covenants running with the land, use restriction, or other
mechanism approved by HUD under which the PJ has the right to require specific
performance. In addition, the agreement must specify remedies for breach of the
provisions of the agreement.
h.Plan of Conversion: PJs that intend to allow conversion of HOME-ARP NCS projects
to other permanent affordable housing as permitted in this Notice must describe
conversion as a possible outcome of the HOME-ARP NCS project; specify the
conditions under which conversion will be permitted; and require that the PJ approve the
terms and conditions of any conversion before the conversion occurs.
i.Additional PJ Conditions and Requirements: PJs may include additional program and
project requirements as determined necessary.
5.Non-Profit Operating and Capacity Building: The requirements at 24 CFR 92.504(c)(6),
apply to the use of HOME-ARP funds for non-profit operating and capacity building
assistance. The written agreement must describe the amounts and uses of HOME-ARP
funds for operating expenses or capacity building. If the non-profit organization is not also
receiving HOME-ARP funds to carry out a HOME-ARP project, the agreement must
provide that the organization is expected to receive funds for a HOME-ARP project within
24 months of the date of receiving the funds for operating or capacity building expenses and
must specify the terms and conditions upon which this expectation is based and the
consequences of failure to receive funding for a project.
When a PJ provides both operating assistance and capacity building assistance to an
organization, it must enter into either one written agreement for both types of assistance or
separate written agreements for operating expense assistance and capacity building
assistance. If a PJ chooses to enter into one written agreement, the PJ must separately
identify the scope of assistance, eligible uses and costs, and a budget for each type of funds.
C.Grants Management
1.HOME-ARP Grant Agreement: HUD will make HOME-ARP funds available to the PJ
pursuant to a HOME-ARP Grant Agreement, consistent with Section VIII.C.2 below.
Subject to the provisions of the grant agreement and requirements in this Notice, HUD will
obligate HOME-ARP funds to the PJ upon execution of the agreement by both parties. In
the grant agreement, the PJ agrees that funds invested in affordable housing under this
Notice are repayable if the housing no longer meets the requirements of this Notice during
the compliance period or the NCS no longer meets the requirements of this Notice during
the restricted use period. The PJ also agrees to assume all responsibility for environmental
review, decision making, and actions, as specified and required in regulation at 24 CFR
92.352 and 24 CFR Part 58. The PJ agrees to comply with 24 CFR 92.505 and applicable
Uniform Administrative Requirements at 2 CFR part 200, as amended. The PJ agrees to
comply with requirements established by the Office of Management and Budget (OMB)
concerning the unique entity identifier and System for Award Management (SAM)
requirements in Appendix I to 2 CFR part 200, as amended, and the Federal Funding
Accountability and Transparency Act (FFATA) in Appendix A to 2 CFR part 170. The PJ
agrees to comply with the federal nondiscrimination and equal opportunity requirements at
24 CFR 92.350 and affirmative marketing requirements in 24 CFR 92.351 and the VAWA
requirements set forth in 24 CFR 92.359. The HOME-ARP grant is obligated when the
HUD Authorized Official signs the memorandum obligating HOME-ARP grants. The
HOME-ARP Grant Agreement must be signed by the CPD Field Office Director and
counter-signed by the PJ’s authorized signatory. Once the CPD division in the local field
office receives the fully executed HOME-ARP Grant Agreement, it will send the agreement
to HUD’s CFO Accounting Office for processing. As described in Section VIII.C.2 of this
Notice, funds will become available to the PJ in IDIS once HUD’s CFO Accounting Office
processes the grant.
2.Access to Administrative Set-aside Funds: Upon issuance of this Notice, HUD will
obligate all HOME-ARP grants to PJs through the signing of the HOME-ARP obligating
memorandum, after which each HOME-ARP Grant Agreement must be signed by both
parties. After obligation, HUD will permit the PJ to use 5 percent of its award for eligible
administrative and planning costs under Section VI.A of this Notice. The PJ may not
expend any funds for non-administrative and planning costs before the HOME-ARP
allocation plan is accepted by HUD as described in Section V.D.2 and 3 of this Notice.
HUD will make the remaining HOME-ARP grant funds available to the PJ once HUD
accepts the HOME-ARP allocation plan. If the PJ does not submit a HOME-ARP allocation
plan or if the PJ’s plan is not accepted within a reasonable period of time, as determined by
HUD, any costs incurred or HOME-ARP funds expended by the PJ will be considered
ineligible costs and must be repaid with non-Federal funds in accordance with guidance
from HUD.
3.HOME-ARP Grant Number: The PJ’s HOME-ARP grant number is similar to its HOME
grant number with the exception of the source type code. All HOME-ARP grants have the
program identifier “M” and the source year of the grant “21.” The different source type
codes are identified in the table below.
Source Type
Description
HOME Source
Type Code
HOME-ARP
Source Type Code
HOME Consortium DC DP
Metropolitan City MC MP
State SG SP
Insular Area ST IP
Urban County UC UP
The unique grantee identifier portion of the grant number will be the same for HOME-ARP
grants as it is for HOME grants. See examples of HOME-ARP grant numbers with the
different source type codes in the table below.
Participating
Jurisdiction
HOME Grant
Number
HOME-ARP
Grant Number
Maryland M21SG240100 M21SP240100
Baltimore M21MC240200 M21MP240200
4.Budget Period: The budget period for HOME-ARP grants begins on the Federal Award
Date, which is the date of the HUD Authorized Official’s signature specified on the HOME-
ARP Grant Agreement. The budget period for HOME-ARP grants ends on September 30,
2030. The PJ may not expend any HOME-ARP funds after September 30, 2030. After
September 30, 2030, any HOME-ARP funds remaining in the PJ’s HOME Investment Trust
Fund Treasury account will be cancelled and not available for obligation or expenditure for
any purpose (per 31 U.S.C. 1552).
5.Period of Performance: The period of performance for HOME-ARP grants begins on the
Federal Award Date, which is the date of the HUD Authorized Official’s signature specified
on the HOME-ARP Grant Agreement. The period of performance for HOME-ARP grants
ends on September 30, 2030.
6.Audit: Audits of the PJ, State recipients, and subrecipients must be conducted in
accordance with 2 CFR part 200, subpart F.
7.Closeout: HOME-ARP funds will be closed out in accordance with 2 CFR part 200,
subpart D. The PJ will use HUD’s data system to closeout HOME-ARP grants once all
HOME-ARP funds have been expended, all HOME-ARP activities are completed in
accordance with the requirements of this Notice, and the proper beneficiary data has been
entered. In order to closeout its HOME-ARP grants, the PJ must not have any open CPD
monitoring findings or audits related the HOME-ARP funds. HUD will provide closeout
guidance and instructions at a later date.
D.Applicability of Uniform Administrative Requirements.
The requirements of 2 CFR part 200, as amended apply to PJs, State recipients, and
subrecipients receiving HOME-ARP funds, except for the following provisions: 2 CFR
200.306, 200.307, 200.308 (not applicable to participating jurisdictions), 200.311 (except as
provided in 24 CFR 92.257), 200.312, 200.329, 200.333, and 200.334. The provisions of 2 CFR
200.305 apply as modified by 24 CFR 92.502(c) and this Notice. If there is a conflict between
definitions in 2 CFR part 200 and 24 CFR part 92, the definitions in 24 CFR part 92, govern.
Moreover, if there is a conflict between the provisions of 2 CFR part 200 and the provisions of
this Notice, the provisions of this Notice govern.
Where regulations in 24 CFR part 92 refer to specific regulations of 2 CFR part 200 that were or
are renumbered or revised by amendments to 2 CFR part 200, the requirements that apply to the
use of HOME-ARP funds are the applicable requirements in 2 CFR part 200, as amended,
notwithstanding the renumbered regulatory reference.
E.Financial Management
1.The HOME Investment Trust Fund: HUD will establish a HOME-ARP Investment Trust
Fund Treasury account (Treasury account) for a PJ’s HOME-ARP funds. The Treasury
account includes all HOME-ARP funds allocated to the PJ by formula and any HOME-ARP
funds repaid by the PJ.
The PJ must establish a HOME-ARP Investment Trust Fund local account (local account) as
described in 24 CFR 92.500. The PJ may use either a separate local account or, a subsidiary
account within its general fund (or other appropriate fund) as the local account. The PJ may
not use the same local account for HOME-ARP that it uses for its HOME local account.
The local account includes deposits of HOME-ARP funds disbursed from the Treasury
account. The local account must be interest-bearing.
HUD will reduce or recapture any HOME-ARP funds that are in the Treasury account that
are not expended (drawn down) by September 30, 2030. Due to end-of-year financial
system closeouts that begin before this date and prevent electronic access to the payment
system, requests to draw down the funds must be made at least 7 full business days before
this date so that the funds still can be drawn from the Treasury account through IDIS.
2.Program Income: Program Income means gross income received by the PJ generated from
the use of HOME-ARP funds during the grant period of performance. This includes, but is
not limited to, principal and interest payments from a loan made with HOME-ARP funds, or
other income or fees received from project owners in connection with HOME-ARP funds,
and interest earned by the PJ on program income before its disposition.
Program income earned as a result of the use of HOME-ARP funds is HOME program
income and must be used in accordance with the requirements of 24 CFR part 92. All
program income must be recorded in IDIS. Program income must be deposited in the PJ’s
HOME-ARP local account (unless the PJ allows a State recipient or subrecipient to retain
the program income for additional HOME projects pursuant to such terms and conditions in
the written agreement and this Notice). The PJ must enter HOME-ARP program income
retained by the State recipient or subrecipient as a HOME program income receipt in IDIS
and subgrant the program income to the State recipient or subrecipient that retained the
program income. The PJ is responsible to report on the use of its program income in IDIS,
including program income it allowed a State recipient or subrecipient to retain.
3.Repayments: Any HOME-ARP funds used for costs that are not eligible under this Notice,
funds invested in a project that is terminated before completion, either voluntarily or
otherwise, or funds invested in HOME-ARP rental housing and NCS that does not meet the
requirements in this Notice for the applicable period specified in this Notice must be repaid
by the PJ to its Treasury account. If the funds are repaid after September 30, 2030, they will
be recaptured by the U.S. Department of Treasury and the PJ will not be able to re-use the
funds for eligible HOME-ARP activities. HOME-ARP funds may not be repaid to the PJ’s
local account.
4.Integrated Disbursement and Information System (IDIS): The PJ will use IDIS to
administer its HOME-ARP funds. The PJ will request disbursements of HOME-ARP funds
from its Treasury account and collect and report information on the use of HOME-ARP
funds through IDIS. (For purposes of reporting in IDIS, a HOME-ARP project is an
activity.) The PJ must report all program income in IDIS.
The requirements of 24 CFR 92.502(c)(3) do not apply to HOME-ARP funds.
In accordance with this Notice, a HOME-ARP written agreement providing HOME-ARP
funds to a project or the CHDO/nonprofit must be signed and dated by:
a.the PJ and project owner for HOME-ARP rental and HOME-ARP NCS;
b.the PJ and service provider for HOME-ARP supportive services;
c.the PJ and landlord, tenant, and/or HOME-ARP sponsor, as applicable, for HOME-ARP
TBRA; and,
d.the PJ and CHDO/nonprofit organization for HOME-ARP Operating Expenses and
Capacity Building Assistance.
This must occur before any HOME-ARP funds are disbursed. Federal funds cannot be
drawn from the Treasury account in advance of the need to pay an eligible cost.
Consequently, HOME-ARP funds cannot be drawn from the U.S. Treasury and placed in
escrow or advanced in lump sums to State recipients, subrecipients, project owners, service
providers, or landlords or tenants, except funds drawn down for a HOME-ARP rental
project for an operating cost assistance reserve or reserve for replacement pursuant to
Section VI.B.5.g. of this Notice or a HOME-ARP NCS project for a replacement reserve
pursuant to Section VI.E.
Once funds are drawn from the PJ’s Treasury account, they must be expended for an eligible
HOME-ARP cost within 15 days. Any interest earned within the 15-day period may be
retained by the PJ as HOME program income and recorded in IDIS as a program income
receipt. 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 PJ's Treasury account.
Interest earned after 15 days belongs to the United States and must be remitted to the United
States as provided in 2 CFR 200.305(b)(9), except interest amounts up to $500 per year may
be retained for the PJ’s administrative expenses.
Additional HOME-ARP funds may be committed to a project up to one year after project
completion.
HUD will govern access to IDIS by other entities participating in the HOME program (e.g.,
State recipients). Only PJs and State recipients (if permitted by the State) may request
disbursement.
F.Recordkeeping
Each PJ must establish and maintain sufficient records to enable HUD to determine whether the
PJ has met the requirements of this Notice. At a minimum, the following records are needed:
1.Program Records:
a.Records evidencing that all HOME-ARP funds used by a PJ for TBRA, supportive
services, and acquisition and development of non-congregate shelter units benefit
individuals and families in qualifying populations.
b.Records evidencing that not less than 70 percent of affordable rental housing units
acquired, rehabilitated, and/or constructed with HOME funds by a PJ are restricted for
occupancy by households in the qualifying populations.
c.Records documenting compliance with the 15 percent limitation on administrative and
planning costs.
d.Records documenting compliance with the 5 percent limitation on CHDO and non-profit
operating and capacity building costs.
e.The underwriting and subsidy layering guidelines adopted in accordance with Section
VI.B.10 of this Notice that support the PJ's HOME-ARP allocation plan certification.
f.If existing debt is refinanced for multifamily rehabilitation projects, the HOME-ARP
refinancing guidelines established in the HOME-ARP in the HOME-ARP Allocation
Plan.
g.If HOME-ARP funds are used for TBRA, records supporting the PJ's written selection
policies and criteria; supporting documentation for preferences for specific categories of
qualifying individuals; and records supporting the rent standard and minimum tenant
contribution established in accordance with Section VI.C.7 and 8 of this Notice.
h.Confidentiality.
i.The PJ’s written policies and procedures for maintaining confidentiality of
qualifying households as individuals or families fleeing, or attempting to flee
domestic violence, dating violence, sexual assault, stalking, or human trafficking in
accordance with Section VIII.H.
ii.The PJ’s written policies and procedures for maintaining confidentiality in
compliance with the VAWA protections contained in 24 CFR Part 5, Subpart L.
2.Project Records: PJs are required to retain the following records for HOME-ARP-assisted
projects, as specified by activity type.
a.A full description of each project assisted with HOME-ARP funds, including the
location (address of project), form of HOME-ARP assistance, and the units, families, or
qualifying households assisted with HOME-ARP funds, subject to confidentiality
requirements in this Notice.
b.The source and application of funds for each project, including supporting
documentation in accordance with 2 CFR 200.302; and records to document the
eligibility and permissibility of the project costs, including the documentation of the
actual HOME-ARP-eligible development costs of each HOME-ARP-assisted unit as
defined in this Notice.
c.Records (i.e., written agreements) demonstrating compliance with the written agreement
requirements in Section VIII.B of this Notice.
d.Records (e.g., inspection reports) demonstrating that each HOME-ARP rental project
meets the property standards in Section VI.B.11 of this Notice at project completion and
through the applicable minimum compliance period. In addition, during a HOME-ARP
rental project’s minimum compliance period, records demonstrating compliance with the
property standards and financial oversight pursuant to 24 CFR 92.504(d) and the
operating cost assistance reserve management and oversight required by Section VI.B.23
of this Notice.
e.Records (e.g., inspection reports) demonstrating that each unit occupied by a qualifying
household receiving HOME-ARP TBRA, meets the housing quality standards of Section
VI.C.9 of this Notice at initial occupancy and throughout the household’s term of
assistance.
f.Records (e.g., inspection reports) demonstrating that each NCS project meets the
property and habitability standards of Section VI.E.7 of this Notice at project completion
and throughout the applicable restricted use period.
g.Records demonstrating that each qualifying household is eligible for HOME-ARP
assistance based on the requirements of the ARP and Section IV of this Notice.
h.Records demonstrating that each household qualifying as homeless, records that meet
the requirements in 24 CFR 576.500(b)(1), (2), (3), or (4), as applicable (except that
youth aged 24 and under must not be required to provide third-party documentation to
show they are homeless to receive any shelter, housing, or services for which ESG or
CoC Program funds may be used to supplement the HOME-ARP assistance).
i.Records demonstrating that each household qualifying as “at risk of homelessness,”
records that meet the requirements in 24 CFR 576.500(c)(1) or (2), as applicable, and
include the following documentation of annual income:
i.Income evaluation form containing the minimum requirements specified by
HUD and completed by the recipient or subrecipient; and
ii.Source documents for the assets held by the household and income received
over the most recent period for which representative data is available before the
date of the evaluation (e.g., wage statement, unemployment compensation
statement, public benefits statement, bank statement);
iii.To the extent that source documents are unobtainable, a written statement by the
relevant third party (e.g., employer, government benefits administrator) or the
written certification by the recipient's or subrecipient's intake staff of the oral
verification by the relevant third party of the income the household received over
the most recent period for which representative data is available; or
iv.To the extent that source documents and third-party verification are
unobtainable, the written certification by the household of the amount of income
the household received for the most recent period representative of the income
that the household is reasonably expected to receive over the 3-month period
following the evaluation.
j.Records demonstrating compliance with the household income requirements in
accordance with Section VI.B.12 of this Notice for each HOME-ARP rental project.
k.Records demonstrating that each HOME-ARP rental and NCS project meets the
minimum compliance period or restricted use period described in Sections VI.B.18 and
VI.E.9 respectively, of this Notice.
l.Records demonstrating that for each HOME-ARP rental housing unit or for each
household receiving HOME-ARP TBRA, compliance with the tenant protection
requirements of Sections VI.B.19 and VI.C.2, respectively, of this Notice. For HOME-
ARP TBRA or rental projects under a master lease, the PJ must retain records
demonstrating that a master lease for housing leased by a HOME-ARP sponsor and each
sublease between a qualifying household and HOME-ARP sponsor complies with the
tenant and participant protections of 24 CFR 92.253 and this Notice. Records must be
kept for each household.
m.Records demonstrating compliance with the return of the HOME-ARP rental capitalized
operating cost assistance reserve and/or the NCS replacement reserve at the end of the
compliance or restricted use period in accordance with Sections VI.B.24 and VI.E.10
respectively, of this Notice.
n.Records demonstrating that each HOME-ARP rental and each NCS project meets the
underwriting and subsidy layering or due diligence requirements of Section VI.B.10 or
VI.E.6 of this Notice.
o.Records demonstrating that each HOME-ARP rental housing project meets the rent
limitations of Sections VI.B.13 and VI.B.15 of this Notice for the 15-year minimum
compliance period. Records must be kept for each household assisted.
p.Records demonstrating that each multifamily HOME-ARP rental housing project
involving rehabilitation with refinancing complies with the refinancing guidelines
established in accordance with 24 CFR 92.206(b).
q.Records demonstrating that a site and neighborhood standards review was conducted for
each HOME-ARP rental housing project involving new construction under Section VI.B
of this Notice to determine that the site meets the requirements of 24 CFR 983.57(e)(2)
and (e)(3), in accordance with 24 CFR 92.202.
r.Records demonstrating that any conversion of HOME-ARP NCS complies with the
requirements established by Section VI.E of this Notice, including that conversion of
NCS only occurred after the end of the applicable minimum use period defined in Section
VI.E.11.
s.For all HOME-ARP NCS projects the following documents must be maintained, as
applicable:
i.Purchase contract, closing documents, settlement statement and title work for
acquisitions.
ii.Appraisal or other estimation of value to justify acquisition expenditure.
iii.Architectural and engineering contracts and completed designs, plans, and
specifications for rehabilitation and new construction activities.
iv.Invoices, pay requests, and proof of payment for all project expenditures.
v.Proof of insurance.
vi.Project and program audits.
t.For all HOME-ARP Supportive Services projects pursuant to McKinney-Vento or
Homelessness Prevention Supportive Services:
i.Records, where applicable, demonstrating compliance with the termination of
assistance requirement as described in Section VI.D.5 of this Notice.
ii.Records of all solicitations of and agreements with subrecipients and contractors,
records of all payment requests by and dates of payments made to subrecipients,
and documentation of all monitoring and sanctions of subrecipients, as
applicable including any findings and corrective actions required.
iii.Records of all procurement contracts and documentation of compliance with the
procurement requirements in 2 CFR part 200, subpart D, as revised by Section
VIII.D of this Notice.
iv.Records evidencing the use of the written procedures required under Section
VI.D.2 and records evidencing compliance with Section IV.C.2 of this Notice.
v.Records of all leases, subleases, and financial assistance agreements for the
provision of rental payments, documentation of payments made by the PJ to
owners, HOME-ARP sponsor, or qualifying households for the provision of
financial assistance for rental payments, and supporting documentation for these
payments, including dates of occupancy by qualifying individuals and families.
vi.Records that document the monthly allowance for utilities (excluding telephone)
used to determine compliance with the rent restriction.
vii.Records of the types of services provided under the PJ’s program and the
amounts spent on these services.
viii.Records demonstrating subrecipient compliance with the recordkeeping
requirements in Section VIII.F of this Notice.
u.For all HOME-ARP Housing Counseling Services projects as defined in 24 CFR part 5,
each participating housing counseling agency must maintain a recordkeeping and
reporting system in accordance with 24 CFR 214.315 and 24 CFR 214.317. The system
must permit HUD to easily access all information needed for a performance review.
v.For all HOME-ARP-assisted nonprofit operating expense and capacity building
assistance activities:
i.Records concerning the use of funds for nonprofit operating expense and
capacity building assistance must be maintained to enable HUD to determine
whether the PJ has met the requirements of Section VI.F of this Notice.
ii.Written agreements between the PJ and the nonprofit organization providing
nonprofit operating expense assistance or capacity building assistance must be
retained for five years after the agreement terminates.
3.Financial records:
a.Records, in accordance with 2 CFR 200.302, identifying the source and application of
HOME-ARP funds. Identification must include, as applicable, the Assistance Listing
program title and number (formerly Catalogue of Federal Domestic Assistance), Federal
award identification number and year, name of the Federal agency, and name of the
pass-through entity, if any.
b.Records concerning the HOME-ARP Investment Trust Fund Treasury account and local
account required to be established and maintained by this Notice, including deposits,
disbursements, balances, supporting documentation and any other information required
by IDIS.
c.Records identifying the source and application of program income and repayments.
d.Records demonstrating adequate budget control and other records required by 2 CFR
200.302, including evidence of periodic account reconciliations.
4.Program administration records:
a.Records demonstrating compliance with the written agreements required by Section
VIII.B of this Notice.
b.Records demonstrating compliance with the applicable uniform administrative
requirements required by Section VIII.D of this Notice.
c.Records documenting required inspections, monitoring reviews and audits, and the
resolution of any findings or concerns.
5.Records concerning other Federal requirements:
a.Equal opportunity and fair housing records.
i.Data on the extent to which each racial and ethnic group, and single-headed
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-
ARP funds.
ii.Documentation that the PJ submitted a certification that it will affirmatively
further fair housing consistent with HUD’s Interim Final Rule entitled Restoring
Affirmatively Furthering Fair Housing Definitions and Certifications (86 FR
30779, June 10, 2021) (codified at 24 CFR 5.151 and 5.152;), available at
https://www.federalregister.gov/documents/2021/06/10/2021-12114/restoring-
affirmatively-furthering-fair-housing-definitions-and-certifications.
iii.Records demonstrating compliance with the nondiscrimination and equal
opportunity requirements of 24 CFR 92, Subpart H.
b.Affirmative marketing and MBE/WBE records.
i.Records demonstrating compliance with the affirmative marketing procedures
and requirements of 24 CFR 92.351 and this Notice.
ii.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-ARP 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.
c.Records demonstrating compliance with the environmental review requirements of 24
CFR 92.352, 24 CFR part 58, and this Notice including flood insurance requirements.
d.Records demonstrating compliance with the requirements of 24 CFR 92.353 and the
provisions of Section VII.F of this Notice regarding displacement, relocation, and real
property acquisition, including but not limited to:
i.project occupancy lists identifying the name and address of all persons
occupying the real property on the date described in 24 CFR 92.353(c)(2)(i)(A),
moving into the property on or after the date described in 24 CFR
92.353(c)(2)(i)(A), and occupying the property upon completion of the project;
ii.lists of all individuals or families occupying hotels and motels and other
nonresidential properties acquired, rehabilitated, and/or demolished and newly
constructed to become HOME-ARP NCS or HOME-ARP rental housing that
qualify for assistance under this Notice as members of a qualifying population,
as well as records indicating whether such persons were assisted by the HOME-
ARP program by the PJ following the closure of the nonresidential properties
because of HOME-ARP activities
iii.lists of all individuals or families occupying HOME-ARP NCS that were
converted during the required use period that qualify for assistance under this
Notice, as well as records indicating whether moving costs or advisory services
were provided as part of HOME-ARP administrative costs or under the HOME-
ARP supportive services activity in Section VI.D of this Notice, and records
indicating whether such persons were assisted by the HOME-ARP program by
the PJ following the conversion of the HOME-ARP NCS units.
iv.Documentation that the PJ has and followed a RARAP in accordance with 24
CFR 92.353 and 24 CFR 42.325.
e.Records demonstrating compliance with the labor requirements of 24 CFR 92.354,
including contract provisions and payroll records.
f.Records demonstrating compliance with the lead-based paint requirements of 24 CFR
part 35, subparts A, B, J, K, M and R, as applicable.
g.Records supporting compliance with conflict of interest requirements in 24 CFR 92.356,
as revised by Section VII.H of this Notice, as well as documentation of any exceptions
granted by HUD or a state PJ, as applicable, to the conflict of interest provisions in 24
CFR 92.356, as revised by Section VII.H of this Notice.
h.Records demonstrating compliance with debarment and suspension requirements in 2
CFR part 2424.
i.Records concerning intergovernmental review, as required by 24 CFR 92.357.
j.Records of emergency transfers requested under 24 CFR 5.2005(e) and 24 CFR 92.359
pertaining to victims of domestic violence, dating violence, sexual assault, or stalking,
including data on the outcomes of those requests.
k.Documentation of actions undertaken to meet the requirements of 24 CFR part 75 which
implements section 3 of the Housing Development Act of 1968, as amended (12 U.S.C.
1701u).
6.State Recipients and Subrecipients: A PJ that distributes HOME-ARP funds to State
recipients or subrecipients must require the State recipients or subrecipients to keep the
records required by paragraphs 1. program records, 2. project records, 3. financial records,
4. program administration records, and 5. records concerning other federal requirements of
Section VIII.F of this Notice, and such other records as the PJ determines to be necessary to
enable the PJ to carry out its responsibilities under this Notice. The PJ need not duplicate the
records kept by the State recipients or subrecipients. The PJ must keep records concerning
its annual review of the performance and compliance of each State recipient and
subrecipient as required under 24 CFR 92.504(a).
7.Period of record retention: All records pertaining to HOME-ARP funds must be retained
for five years, except as provided below.
a.For HOME-ARP 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.
b.For HOME-ARP TBRA projects, records must be retained for five years after the period
of rental assistance terminates.
c.Written agreements must be retained for five years after the agreement terminates.
d.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 24 CFR 92.353.
e.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.
8.Access to records: The PJ must provide citizens, public agencies, and other interested
parties with reasonable access to records, consistent with applicable state and local laws and
any other applicable grant conditions from other federal grant programs regarding privacy
and obligations of confidentiality.
The PJ, subrecipient, contractor, or owner may create a program participant identifier code
or number that can be used on a file and maintained internally, in such a way that the
number itself does not inadvertently identify the program participant, (i.e., no use of initials,
date of birth, or other pieces of information that might suggest the identity of the program
participant). The “key” or “cypher” for the program participant identifier code would itself
be confidential and would not leave the provider. In the circumstance of HUD programs, the
Unique Personal Identification Number which is generated within the comparable database
could be used with auditors to identify records of services to distinct individuals, subject to
the below requirement.
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 PJ,
state recipients, and subrecipients, in order to make audits, examinations, excerpts, and
transcripts. If a provider of services or operator of an NCS is subject to state or local laws
or other federal grant programs that require that HUD not be given access to records
detailing PII of victims, then auditors or evaluators may be given access to representative
files without any sharing of individual identifying information.
G.Reporting and Performance Reports.
The PJ must submit reports in a format and at such time as prescribed by HUD. In addition,
HUD and Office of the Inspector General (OIG) staff must be given access, upon reasonable
notice, to all information related to the selection, award, and use of HOME-ARP funds.
Each PJ must enter the required HOME-ARP data elements timely in IDIS.
1.For HOME-ARP rental activities under Section VI.B of this Notice, the PJ must enter
complete project completion information when it completes the activity in IDIS, except the
assisted units can be marked vacant until they are occupied by eligible households.
2.For HOME-ARP NCS activities under Section VI.E of this Notice, the PJ must enter
complete project completion information when it completes the activity in IDIS. In
addition, the PJ must report the disposition of any HOME-ARP-assisted NCS activity that is
converted to another eligible use at the time of conversion.
3.For HOME-ARP TBRA activities under Section VI.C of this Notice, the PJ must report
beneficiary information in IDIS at the time assistance is provided.
4.For HOME-ARP Supportive Services activities under Section VI.D of this Notice, the PJ
must report in IDIS quarterly, by the 30th day after the end of each calendar quarter, on the
number of homeless and not homeless households assisted with supportive services and
housing counseling, including the race and ethnicity, household size, and household type of
the households assisted.
HUD will issue guidance about reporting on HOME-ARP activities in the PJ’s consolidated
annual performance and evaluation report (CAPER) required under 24 CFR 91.520, at a later
date.
H.Confidentiality Requirements
1.All entities assisted by HOME-ARP funds must develop, implement, and maintain written
procedures to require that –
a.All records containing personally identifying information of any individual or family
who applies for and/or receives HOME-ARP assistance will be kept secure and
confidential;
b.The address or location of any NCS or HOME-ARP rental housing exclusively for
individuals fleeing or attempting to flee domestic violence, dating violence, sexual
assault, stalking, or human trafficking will not be made public, except as necessary
where making the address or location public does not identify occupancy of the NCS or
HOME-ARP rental housing, when necessary to record use restrictions or restrictive
covenants in accordance with Section VI.B or VI.E, or with written authorization of the
person or entity responsible for the operation of the NCS or HOME-ARP rental housing;
and
c.The address or location of any program participant that is a fleeing or attempting to flee
domestic violence, dating violence, sexual assault, stalking, or human trafficking will
not be made public, except as provided under a privacy policy of the PJ consistent with
state and local laws and any other grant conditions from other federal grant programs
regarding privacy and obligations of confidentiality.
2.Documenting status of a qualifying population that is fleeing or attempting to flee domestic
violence, dating violence, stalking, sexual assault, or human trafficking:
a.If an individual or family qualifies because the individual or family is fleeing or
attempting to flee domestic violence, dating violence, sexual assault, stalking, or human
trafficking then acceptable evidence includes an oral or written statement by the
qualifying individual or head of household seeking assistance that they are fleeing that
situation. An oral statement may be documented by either –
i.a written certification by the individual or head of household; or
ii.a written certification by a victim service provider, intake worker, social worker,
legal assistance provider, health-care provider, law enforcement agency, legal
assistance provider, pastoral counselor, or an intake worker in any other
organization from whom the individual or family sought assistance.
The written documentation need only include the minimum amount of information
indicating that the individual or family is fleeing or attempting to flee domestic violence,
dating violence, sexual assault, stalking, or human trafficking and need not include any
additional details about the conditions that prompted the individual or family to seek
assistance.
IX.PERFORMANCE REVIEWS
HUD will review the performance of each PJ in carrying out its responsibilities for the use of
HOME-ARP funds and its compliance with the requirements of this Notice. Such reviews may
take the form of remote or on-site monitoring, review of IDIS data or reports, assessment of
documents requested from the PJ, subrecipient, or other entity carrying out HOME-ARP
activities, and inquiries resulting from external audit reports, media reports, citizen complaints,
or other sources of relevant information. HUD may also review a PJ’s timely use of HOME-
ARP funds for eligible activities, including the progress of expenditures for individual projects
or activities, the requirement to place a project in service in accordance with requirements in
this Notice, and compliance of HOME-ARP rental housing and NCS with the 4-year deadline
for completing projects.
If HUD preliminarily determines that a PJ has not met a requirement of this Notice or an
applicable requirement of the HOME regulations at 24 CFR Part 92, HUD will communicate its
determination in writing and provide the PJ with the opportunity to demonstrate, based on
substantial facts, documentation, and data, that it has done so. HUD may extend any time
period it provided to the PJ to demonstrate its compliance if upon request of the PJ, HUD
determines that is it infeasible for the PJ to provide a full response within the prescribed period.
If the PJ 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 24 CFR 92.552.
A.Corrective and Remedial Actions
Corrective or remedial actions for a performance deficiency (e.g., failure to meet a provision of
this Notice or an applicable provision of 24 CFR Part 92) will be designed to prevent a
continuation of the deficiency; mitigate, to the extent possible, its adverse effects or
consequences; and prevent its recurrence. HUD may impose corrective or remedial actions
including but not limited to the following:
1.HUD may instruct the PJ to submit and comply with proposals for action to correct, mitigate
and prevent a performance deficiency, including:
a.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;
b.Establishing and following a management plan that assigns responsibilities for carrying
out the remedial actions;
c.Canceling or revising activities likely to be affected by the performance deficiency,
before expending HOME-ARP funds for the activities;
d.Reprogramming HOME-ARP funds that have not yet been expended from affected
activities to other eligible activities;
e.Reimbursing its HOME-ARP grant in any amount not used in accordance with the
requirements of this Notice;
f.Suspending disbursement of HOME-ARP funds for affected activities; and
g.Establishing procedures to ensure compliance with HOME-ARP requirements.
2.HUD may also:
a.Change the method of payment from an advance to a reimbursement basis and may
require supporting documentation to be submitted for HUD review for each payment
request before payment is made;
b.Determine the PJ to be high risk and impose special conditions or restrictions on the use
of HOME-ARP funds in accordance with 2 CFR 200.208; and
c.Take other remedies that may be legally available, including remedies under 2 CFR
200.339 and 200.340.
B.Sanctions
The requirements at 24 CFR 92.552 apply to HOME-ARP funds, except that the provision at 24
CFR 92.552(a)(2)(iv) related to failure to comply with matching contribution requirements shall
not apply.
X.FINDING OF NO SIGNIFICANT IMPACT
A Finding of No Significant Impact (FONSI) with respect to the environment has been made in
accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the
National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available for
inspection at HUD's Funding Opportunities web page at:
https://www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps.
25 of 28 City of Yakima
EXHIBIT “C”
Catholic Charities Housing Services – Diocese of Yakima
A.) PROPOSAL SUMMARY/PROJECT ABSTRACT
B.) ASSESSMENT OF NEED/PROBLEM STATEMENT
C.) PROGRAM GOAL AND OBJECTIVES
Goal
Objectives
D.) METHODOLOGY
E.) OUTCOMES & EVALUATION
F.) BUDGET
Casa de la Mora LLLP, an affiliate of Catholic Charities Housing Services – Diocese of Yakima
will be reimbursed up to one million six-hundred thousand ($1,600,000.00) dollars between the
contract execution date and end upon completion of the Project as subject to the terms and
conditions of the Contract and the Budget Summary attached as Exhibit D.
26 of 28 City of Yakima
EXHIBIT “D”
BUDGET SUMMARY
Date of Budget 6/25/2024
Source:
LIHTC Equity
Source:
State HTF
Source:
State NHTF
Source:
City of
Yakima
Source: CCHS
Loan
Source: Deferred
Developer Fee & GP
Contribution
Source: Source:
Acquisition Costs:
Land 2% 625,000$ 625,000$ 625,000$ -$
Existing Structures 0%-$ -$ -$
Liens 0%-$ -$ -$
Closing, Title & Recording Costs 0% 10,000$ 10,000$ 10,000$ -$ -$
Extension payment 0%-$ -$ -$
Other:0% 14,000$ 14,000$ $ 13,500 $500 $-
SUBTOTAL 2% 649,000$ 649,000$ -$ -$648,500$ 500$ -$ -$ -$-$
Construction:
Demolition 0%-$ -$
New Building 55% 17,278,888$ 17,278,888$ 8,920,421$ 4,137,779$ 2,485,930$ 1,734,758$-$
Rehabilitation 0%-$ -$ -$
Contractor Profit 4% 1,252,719$ 1,252,719$ 1,252,719$ -$
Contractor Overhead 2% 691,155$ 691,155$ 691,155$ -$
New Construction Contingency 11%7% 2,105,758$ 2,105,758$ 222,344$ 1,883,414$ -$
Rehab Contingency 0%0%-$ -$ -$
Construction Escalation 1,463,729$ 1,463,729$ 1,463,729$
Accessory Building 0%-$ -$ -$
Site Work / Infrastructure 0%-$ -$ -$
Off site Infrastructure 0%-$ -$ -$
Environmental Abatement - Building 0%-$ -$ -$
Environmental Abatement - Land 0%-$ -$ -$
Sales Tax 6% 1,834,813$ 1,834,813$ 834,813$ 1,000,000$ -$
Bond Premium 0%-$ -$ -$
Equipment and Furnishings 0% 75,000$ 75,000$ 75,000$-$
Other:0% 53,000$ 53,000$ 53,000$-$
SUBTOTAL 78% 24,755,062$ 24,755,062$ 13,385,181$ 7,021,193$ 2,485,930$ -$1,862,758$-$ -$ -$-$
Legal Acquisition, Appraisal
LCP Tracker, Wage Rate Consultant
Project Name: Casa de la Mora
Form 6: Development Budgets
NON-RESIDENTIALRESIDENTIAL
Total Project
Cost Residential
total
non-
residential
total$751,000 $15,671,753 $7,161,193 $2,485,930 $1,600,000 $3,957,508
% Total
Project
Cost
Form 6A
Development Budgets CFA Forms
Date of Budget 6/25/2024
Source:
LIHTC Equity
Source:
State HTF
Source:
State NHTF
Source:
City of
Yakima
Source: CCHS
Loan
Source: Deferred
Developer Fee & GP
Contribution
Source: Source:
Project Name: Casa de la Mora
Form 6: Development Budgets
NON-RESIDENTIALRESIDENTIAL
Total Project
Cost Residential
total
non-
residential
total$751,000 $15,671,753 $7,161,193 $2,485,930 $1,600,000 $3,957,508
% Total
Project
Cost
Soft Costs:
Buyer's Appraisal 0% 4,000$4,000$4,000$ -$
Market Study 0%6,000$6,000$1,875$ 4,125$ -$
Architect 4% 1,279,616$ 1,279,616$ 697,465$ 582,151$ -$
Engineering 0%-$ -$ -$
Environmental Assessment 0%5,000$5,000$400$ 4,600$ -$
Geotechnical Study 0% 60,000$ 60,000$ 53,321$ 6,679$ -$
Boundary & Topographic Survey 0% 16,000$ 16,000$ 9,555$ 6,445$ -$
Legal - Real Estate 0%5,000$5,000$5,000$ -$
Developer Fee 8% 2,500,000$ 2,500,000$ 1,749,000$751,000$-$
Project Management / Dev. Consultant Fees 0%-$ -$ -$
Other Consultants 0% 140,000$ 140,000$ $ 140,000 -$
Soft Cost Contingency 1% 194,950$ 194,950$ $ 194,950 -$
Other:0% 34,300$ 34,300$ $ 34,300 -$
SUBTOTAL 13% 4,244,866$ 4,244,866$ 996,866$ 140,000$ 608,000$ 1,749,000$751,000$-$ -$-$
Pre-Development / Bridge Financing
Bridge Loan Fees 0%-$ -$
Bridge Loan Interest 0%-$ -$
SUBTOTAL 0%-$ -$ -$ -$-$-$ -$ -$ -$-$
Construction Financing
Construction Loan Fees 0% 64,925$ 64,925$ 64,925$ -$
Legal - Construction Loan 0% 50,000$ 50,000$ 50,000$ -$
Sponsor Loan Interest 0% 119,061$ 119,061$ 119,061$ -$
Construction Period Interest 2% 553,323$ 553,323$ 553,323$ -$
Tite & Escrow - Construction Loan 0% 50,000$ 50,000$ 50,000$ -$
SUBTOTAL 3% 837,309$ 837,309$ 737,309$ -$100,000$ -$ -$ -$ -$-$
Construction Testing & NEPA Consultant
Form 6A
Development Budgets CFA Forms
Date of Budget 6/25/2024
Source:
LIHTC Equity
Source:
State HTF
Source:
State NHTF
Source:
City of
Yakima
Source: CCHS
Loan
Source: Deferred
Developer Fee & GP
Contribution
Source: Source:
Project Name: Casa de la Mora
Form 6: Development Budgets
NON-RESIDENTIALRESIDENTIAL
Total Project
Cost Residential
total
non-
residential
total$751,000 $15,671,753 $7,161,193 $2,485,930 $1,600,000 $3,957,508
% Total
Project
Cost
Permanent Financing
Permanent Loan Fees 0% -$ -$
Permanent Loan Expenses 0%-$ -$ -$
Permanent Loan Legal 0%-$ -$ -$
LIHTC Fees 0% 154,388$ 154,388$ 154,388$ -$
LIHTC Legal 0%-$ -$ -$
LIHTC Owners Title Policy 0%-$ -$ -$
State HTF Fees 0%-$ -$ -$
Other:0%-$ -$
SUBTOTAL 0% 154,388$ 154,388$ 154,388$ -$-$-$ -$ -$ -$-$
Capitalized Reserves
Operating Reserves 1% 277,650$ 277,650$ 277,650$ -$
Replacement Reserves 0% 51,100$ 51,100$ 51,100$-$
Other:0%-$ -$
SUBTOTAL 1% 328,750$ 328,750$ -$ -$-$328,750$ -$ -$ -$-$
Other Development Costs
Real Estate Tax 0%-$ -$
Insurance 1% 180,000$ 180,000$ 163,500$ 16,500$-$
Relocation (from Form 4)0%-$ -$ -$
Bidding Costs 0%2,000$2,000$2,000$ -$
Permits, Fees & Hookups 1% 235,009$ 235,009$ 235,009$ -$
Impact/Mitigation Fees 0%-$ -$ -$
Development Period Utilities 0%5,000$5,000$5,000$ -$
Nonprofit Donation 0% 25,000$ 25,000$ 25,000$ -$
Accounting/Audit 0% 12,000$ 12,000$ 12,000$ -$
3rd Party Certification of final development cost 0%4,000$4,000$4,000$ -$
Legal - Organization 0% 35,000$ 35,000$ 35,000$
Legal - Syndication 0% 80,000$ 80,000$ 80,000$
Marketing/Leasing Expenses 0% 50,000$ 50,000$ 50,000$ -$
Syndication Consultant 0% 30,000$ 30,000$ 30,000$ -$
Form 6A
Development Budgets CFA Forms
Date of Budget 6/25/2024
Source:
LIHTC Equity
Source:
State HTF
Source:
State NHTF
Source:
City of
Yakima
Source: CCHS
Loan
Source: Deferred
Developer Fee & GP
Contribution
Source: Source:
Project Name: Casa de la Mora
Form 6: Development Budgets
NON-RESIDENTIALRESIDENTIAL
Total Project
Cost Residential
total
non-
residential
total$751,000 $15,671,753 $7,161,193 $2,485,930 $1,600,000 $3,957,508
% Total
Project
Cost
SUBTOTAL 2% 658,009$ 658,009$ 398,009$ -$243,500$ 16,500$-$ -$ -$-$
Form 6A
Development Budgets CFA Forms
Date of Budget 6/25/2024
Source:
LIHTC Equity
Source:
State HTF
Source:
State NHTF
Source:
City of
Yakima
Source: CCHS
Loan
Source: Deferred
Developer Fee & GP
Contribution
Source: Source:
Project Name: Casa de la Mora
Form 6: Development Budgets
NON-RESIDENTIALRESIDENTIAL
Total Project
Cost Residential
total
non-
residential
total$751,000 $15,671,753 $7,161,193 $2,485,930 $1,600,000 $3,957,508
% Total
Project
Cost
Bond Related Costs of Issuance (4% Tax Credit/Bond Projects Only)
Issuer Fees & Related Expenses 0% -$ -$
Bond Counsel 0%-$ -$
Trustee Fees & Expenses 0%-$ -$
Underwriter Fees & Counsel 0%-$ -$
Placement Agent Fees & Counsel 0%-$ -$
Borrower's Counsel - Bond Related 0%-$ -$
Rating Agency 0%-$ -$
SUBTOTAL 0%-$ -$ -$ -$-$-$ -$ -$ -$-$
Total Development Cost:31,627,384$ 31,627,384$ -$
Total Sources:31,627,384$ 31,627,384$ 15,671,753$ 7,161,193$ 2,485,930$ 1,600,000$ 3,957,508$751,000$-$ -$-$
Form 6A
Development Budgets CFA Forms
27 of 28 City of Yakima
EXHIBIT “E”
RESOLUTION
28 of 28 City of Yakima
EXHIBIT “F”
SUBSIDY ANALYSIS
SUBSIDY ANALYSIS
PROJECT NAME:CCHS Casa de la Mora
Project Address:115 & 116 North 10th Street, Yakima, WA 98901
Parcel #:Parcel 1 #191318-44027, Parcel 2 #191318-43521
Project Type: (check box)New Construction Rehabilitation
When was property acquired if Rehab?Not applicable
Funding Year
How much Funding is being requested?$1,600,000
What will proposed funding be used for?
The proposed funding will be used to build 72 new units of affordable long-term rental
housing. The project will include office space for in home case management, community
spaces for classes, community kitchen, library and respite area.
25 designated units will support qualifying “homeless” population and will be designated
as Permanent Supportive Housing Section 8 Project-Based vouchers. Other groups
including veterans and those at risk of housing instability may be served by remaining
units.
One (1) unit will be designated for on-site manager.
Life Set and Youth and Young Adult programs to serve formerly homeless or at-risk
residents will be integrated into homeless units.
When will project begin? (Estimated)
Additional Funding Sources if any?The HOME ARP funds will leverage the following awarded public funds: WA HTF: $7,161.93
National HTF: $2,485,930, 9% LIHTC Equity: $15,150,876
Other committed funds: CCHS Loan A: $750,000, CCHS Loan B: $2,750,000, Deferred
Developer Fee: $750,000
Applied: City of Yakima HOME ARP: $1,600,000
ACQUISITION FUNDING:
Funding Source:HOME ARP & CCHS LOAN
Number of Parcels: 2
Appraisal Amount:$577,450
Purchase Price:$625,000
DEMOLITION COSTS:
Funding Source:Non Applicable
Estimated Demolition Costs:Non Applicable
LOT BREAKDOWN:
Estimated available building lots:2
Estimated Lot Cost:Parcel #1 $312,500
Parcel #2 $312,500
Estimated Demolition Cost per lot:Not Applicatle
Estimated Total Lot Cost:$625,000
CONSTRUCTION FUNDING:
SUBSIDY ANALYSIS
Funding Source(s):
Address:
Parcel:
Estimated Construction Amount:
SUBSIDY TOTALS:
Acquisition:
Demolition:Not applicable - New Construction
Construction:
Rehabilitation:Not applicable - New Construction
Soft Costs, Reserves
Other Development Cost:
Estimated Appraised Value:
Maximum Per Unit Subsidy Limits for Yakima
0 Bedrooms 54 affordable units will serve 50%, AMI or below
1 Bedroom *36 units for 40% AMI or below
2 Bedrooms *18 units for 30% AMI or below supported by Section 8 vouchers
3 Bedrooms *Remaining 18 units will be referrals from Coordinated Entry programs
4+ Bedrooms 36+18+18=72 units total
PROJECT JUSTIFICATION SUMMARY:The proposed funding will be used to build 72 new units of affordable long-term rental
housing. The project will include office space for in home case management,
community spaces for classes, community kitchen, library and respite area.
25 designated units will support qualifying "homeless" population and will be designated
as Permanent Supportive Housing Section 8 Project-Based vouchers. Other groups
including veterans and those at risk of housing instability may be served by remaining units.
One (1) unit will be designated for on-site manager.
Life Set and Youth and Young Adult programs to serve formerly homeless or
at-risk residents will be integrated into homeless units.
Referrals will come through the Community Coordinated Entry programs.
i4
e+
/A L4141110 !1— i,i
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 3.B.
For Meeting of: December 17, 2024
ITEM TITLE: Resolution authorizing a contract with Catholic Charities Housing
Services of HOME-ARP funds to support the construction of an
affordable housing project known as Casa de la Mora
SUBMITTED BY: Bill Preston, Community Development Director
SUMMARY EXPLANATION:
Catholic Charities Housing Services (CCHS) has requested HOME American Rescue Plan (ARP)funds
from the City of Yakima to assist with construction of a 72-unit affordable housing project known as Casa
de la Mora, located at 115 N 10th St. A total of 36 units will benefit individuals at or below 40°/0 of the City
of Yakima Area Median Income (AMI), and 18 units will be for those at or below 30°/o AMI and will be
supported by Section 8 Project Based Vouchers to support the lowest income residents.
The Casa de la Mora total project cost is estimated to be over 30 million dollars. Other sources of
funding include Washington State Housing Trust Funds ($7,161,193), National Housing Trust Funds
($2,485,930), Low-Income Housing Tax Credit ($15,150,876), and other CCHS loans and deferred
developer fees. The HOME-ARP funds will pay for eligible predevelopment activities for NEPA
clearance, surveys, legal fees, acquisition, environmental assessment consultant fees, and architectural
design fees.
As a Federal HUD Entitlement Grantee for HOME Investment Partnership funds, the City of Yakima was
allocated an award of$1,822,807 in HOME-ARP funds, which City Council accepted on December 6,
2022, via Resolution R-2022-162. The HOME-ARP program provides additional funds for housing
projects and services to specific qualifying populations that address housing instability and
homelessness. The City's HOME-ARP Allocation Plan, which was adopted by City Council in 2023,
identifies $1,640,526 of the funding going towards development of affordable rental housing and
$182,280 going towards administration and planning.
ITEM BUDGETED: Yes
STRATEGIC PRIORITY 24-25: A Safe and Healthy Yakima
RECOMMENDATION: Adopt Resolution.
ATTACHMENTS:
Resolution_CCHS Casa de la Mora HOME-ARP.docx
CDLM_HOME-ARP Contract.final.pdf
CDLM_COVENANT_YAKHome.pdf
CDLM_DOT_YAKHome.pdf
4
CDLM_PROMISSORY NOTE_YAKHome.pdf
CDLM_Preliminary Drawings for Reference.pdf
CDLM_Elevation Drawing.pdf
CDLM_Priority and Subordination Agreement.pdf
5