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Can CHDO set-aside funds be used to provide downpayment assistance?

Date Published: November 2013

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Yes. When a CHDO provides downpayment assistance to a buyer of a property that it developed with CHDO set-aside funds, it can use additional CHDO set-aside funds to provide downpayment assistance to that buyer. The 2013 Rule limits this assistance to no more than 10 percent of the total amount of HOME development funds. The 10 percent limitation only applies when additional CHDO set-aside funds are used to provide the homebuyer assistance and to projects for which funds were committed on or after August 23, 2013. When a CHDO administers a downpayment assistance program, it is acting as a subrecipient, not a developer of affordable housing; this is not an eligible use of set-aside funds per §92.300.


Tags: HOME CHDO - Set-Aside Funds

FAQ ID:

2289