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  • Data and Limits

HOME Maximum Per-unit Subsidy Limits

Date Published: March 2014

Description

Due to the discontinuation of the Section 221(d)(3) mortgage insurance program, alternate maximum per-unit subsidy limits must be used for the HOME Program. HUD is required to undertake rulemaking to establish new maximum per-unit subsidy limits for the HOME Program because it is no longer updating and publishing limits for the Section 221(d)(3) mortgage insurance program. Until a new rule can be published, HUD published a Notice establishing an interim policy that Field Office staff and participating jurisdictions (PJs) must follow directing PJs to use the Section 234-Condominium Housing basic mortgage limits, for elevator-type projects, as an alternative to the Section 221(d)(3) limits in order to determine the maximum amount of HOME funds a PJ may invest on a per-unit basis in HOME-assisted housing projects. This interim policy remains in effect until the effective date of the new final rule provisions, amending the existing provisions of 24 CFR 92.250(a).

The Section 234 program insures blanket mortgages for the construction or substantial rehabilitation of multifamily projects to be sold upon completion as individual condominium units. Overtime, these limits issued by HUD have been identical to the Section 221(d)(3) limits. Consequently, substituting the Section 234 basic mortgage limits for the Section 221(d)(3) limits is consistent with the intent of NAHA and the implementing provisions of the HOME Final Rule.

HUD’s Office of Multifamily Housing updates the Section 234 basic mortgage limits annually and publishes them in the Federal Register. The Office of Multifamily Housing also establishes high cost percentage exceptions (HCP) for specific areas. To ensure consistency with the provisions of section 212(e)(1) of NAHA and 24 CFR 92.250(a), the HOME maximum per-unit subsidy limit that HUD can approve for a PJ cannot exceed 240 percent of the Section 234 basic mortgage limit (i.e. 100 percent of the basic mortgage limit plus up to 140 percent in high cost areas). For a PJ whose HCP has been increased above the 240 percent, the CPD Division must cap the HOME per-unit subsidy limit at 240 percent of the Section 234 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. PJs should not calculate their own HOME per-unit subsidy limits by using the High Cost Percentages and the Section 234 basic mortgage limits that are published in the Federal Register by HUD's Office of Multifamily 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).

Limits

2014

Annual Indexing of Basic Statutory Mortgage Limits for Multifamily Housing Programs (Section 234) (PDF)

Annual Base City High Cost Percentage Exceptions (HCP) (PDF)

Resource Links

Interim Policy on Maximum Per-Unit Subsidy Limits for the HOME Program (PDF)


Historical

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.

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.
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).

Resource Links

2012 Section 221(d)(3) Limits for All HOME Projects (PDF)

HOMEfires - Vol. 9 No. 4, August 2008 (Revised) (PDF)

Program:

  • HOME: HOME Investment Partnerships Program

Resource Approver:

  • HUD Approved

Author Organization:

  • HUD

Topic:

  • Program Requirements
    • Maximum Per Unit Subsidy