Date Published: March 2014
Note: Starting in 2013, Section 221(d)(3) program limits will no longer be calculated and published by HUD due to the elimination of the 221(d)(3) Mortgage Program. The HOME statute and the HOME regulation at 24 CFR 92.250(a) limit the amount of HOME funds that a PJ may invest in a HOME-assisted unit. The maximum HOME per-unit subsidy limit is set at the basic Section 221(d)(3)(ii) mortgage limit for elevator-type projects, by bedroom size (with adjustments up to 240% for “high cost” geographic areas).
Because HUD is no longer calculating 221(d)(3) limits, PJs must continue to use the 2012 published Section 221(d)(3) limits for all HOME projects, until further notice from the Office of Community Planning and Development at HUD. These limits were published in December 2011, and became effective January 1, 2012.
HOME maximum per unit subsidy limits are based on the Section 221(d)(3) limits for elevator-type projects. These limits are determined by HUD's Office of Multi-Family Housing Programs. Limits for certain "base cities" are issued. However, there is no comprehensive list of these limits for all jurisdictions.
Although the FY 2008 Appropriations Act increased the maximum exceptions that the Secretary can grant for the Section 221(d)(3) program, the Act did not make conforming changes to the HOME statute. Therefore, the maximum HOME per-unit subsidy limit that HUD can approve for a participating jurisdiction (PJ) remains 240 percent of the basic Section 221(d)(3) mortgage limit.
The HOME regulations authorizes the CPD Division in the HUD Field Office to increase a PJ's HOME per-unit subsidy limit when HUD's Office of Multi-Family Housing has increased the PJ's high cost percentage (HCP) above 210 percent of the basic Section 221(d)(3) mortgage limit. The CPD Division may authorize a PJ to use the most recent high cost percentage and corresponding Section 221(d)(3) mortgage limit, provided the resulting HOME per-unit subsidy limit does not exceed 240 percent of the basic Section 221(d)(3) mortgage limit (as required by the HOME statute). For a PJ whose HCP has been increased above 240 percent, the CPD Division must cap the HOME per-unit subsidy limit at 240 percent of the Section 221(d)(3) basic mortgage limit.
Participating jurisdictions should contact the CPD Division in their local HUD Field Offices to obtain the maximum HOME per-unit subsidy limits that apply to their jurisdictions. Participating jurisdictions should not calculate their own HOME per-unit subsidy limits by using the High Cost Percentages and the basic Section 221(d)(3)(ii) mortgage limits that are published in the Federal Register by HUD's Office of Multi-Family Housing.
The per-unit subsidy requirements are described in the HOME regulations at 24 CFR 92.250. The minimum HOME investment in rental housing or homeownership is $1,000 times the number of HOME-assisted units as described in the HOME regulations at 24 CFR 92.205(c).