An NSP grantee used NSP funds to acquire and rehabilitate a home. Can the grantee use other sources of HUD funding, such as HOME or CDBG, to providing financing assistance to a homebuyer to purchase the NSP home?

Date Published: October 2012

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Yes, a grantee may provide an eligible homebuyer with other sources of HUD funding such as HOME and CDBG to help the eligible homebuyer purchase the NSP assisted home. Grantees must ensure that multiple forms of assistance do not overly subsidize the purchase and that where the regulations of different programs differ; the more stringent regulation is followed. Grantees may not replace one federal source of funds with another; such an investment is not necessary. For example, if the project is 100% financed with NSP, it is impermissible to replace some of those funds with a HOME soft second mortgage.

Tags: NSP Underwriting and Project Selection - Subsidy Layering