Comparison of HOME and HTF
The HOME and HTF programs are similar in many ways, but also have some distinct differences.
In large part, the rules for HTF are based on HOME requirements. Many of the key requirements are similar, including:
- Project requirements
- Long-term affordability
- Property standards
- Per-unit subsidy limits
- Administrative requirements
- Certain cross-cutting federal requirements
Key Differences Between HOME and HTF
Since the programs’ goals differ, there are some key differences between HOME and HTF. Unlike HOME, HTF provides for:
- Deeper Income Targeting to VLI and ELI Households. HTF funds are targeted to provide housing for ELI and VLI households. This is a lower income group that are not typically served by HOME and is a common gap in the available housing options in most markets. HTF investments help to reduce the number of homeless and rent burdened families by providing units affordable for ELI and VLI households.
- Emphasis on Rental Housing. Because of the income targeting requirements, HTF is generally focused on creating affordable rental housing. HOME’s targeting allows homebuyer assistance for households up to 80 percent area median income (AMI). Households between 60 percent and 80 percent AMI are more likely to qualify for private mortgages and may be better able to take advantage of sustainable homeownership opportunities than ELI and VLI households. HTF is often used alongside HOME funds to provide the additional funding needed to target rental housing more deeply.
- Longer Affordability Periods (30 years). HOME-funded rental housing requires an affordability period based on activity type and the average HOME-per unit investment. HOME projects are subject to affordability periods ranging from 5 to 20 years. HTF investments for rental housing carry a 30-year minimum affordability period to create long-term affordable housing opportunities.
- Eligibility of Operating Assistance. Operating cost subsidies are permitted for HTF-assisted units when project-based assistance is not available. HTF funds can pay for the operating deficit remaining for HTF-assisted units after the monthly rent payment has been applied. HTF operating funds may be used to ensure the financial stability for projects with units that do not generate rent revenue at the level needed to cover all operating costs. HOME is a housing production program and HOME funds cannot pay operating shortfalls except for Initial operating reserve funds used during lease-up (the first 18 months of a HOME project).
|Statutory Authority||Title I of the Housing and Economic Recovery Act of 2008||Title II of the Cranston-Gonzalez National Affordable Housing Act of 1990, as amended|
|Regulatory Authority||24 CFR Part 93||24 CFR Part 92|
|Grantees||States or State designated entities||40% of funds to States; 60% to local participating jurisdictions|
|Purpose||State determines priority housing need throughout the State for production or preservation, primarily of rental housing, affordable and available to extremely low-income households||State or local government determines mix of activities to address locally-identified priority housing needs, through development or rehabilitation of housing for rent or homeownership, repair of substandard owner-occupied housing, or provision of tenant-based rental assistance|
|Minimum Grant Threshold||States: $3 million minimum, or alternative methodology if minimum funding is not available||States: $3 million|
|Matching Requirement||No match requirement||25% match required. Reductions possible based on fiscal distress reduction or Presidentially-declared major disaster|
|Minimum Income Targeting||
*Note: required housing counseling for homebuyers
|Limits on Eligible Activities||
||Grantee determines mix of activities to be undertaken and tenure types of housing to be assisted, based upon on locally-determined needs and priorities|
|Use With Public Housing||May be used on public housing units being constructed or rehabilitated in Choice Neighborhoods or mixed finance/LIHTC projects||May not be used for construction, modernization or operating cost assistance for public housing units, except that HOME funds may be used for new construction of public housing units that also receive HOPE VI funding but no Capital Fund assistance|
|Rents||Rents plus utilities are capped at 30% of the income of a household whose income is 30% AMI||High HOME rents (including utilities) are capped at the lesser of: the Fair Market Rent (FMR) for the area or 30% of the income of a household whose income is 65% of AMI.
Low HOME rents (including utilities) are capped at 30% of the income of a household whose income is 50% of AMI, or if there is Federal or State projectbased rental assistance, 30% of the tenant’s adjusted gross income
|Administrative Funds||Up to 10% of the sum of annual grant and program income received||Up to 10% of the sum of annual grant and program income received|
|Allocation Plan/ Action Plan/ Consolidated Plan||
||Each grantee must establish a Consolidated Plan Annual Action Plan that includes the planned use of HOME funds to be approved by HUD|
|Maximum Per-Unit Subsidy Limits||Limits are set by grantee based on modest housing units with suitable amenities and local market conditions||Limits are set by 221(d)(3)(ii) of the National Housing Act (12 U.S.C.17151)|
|Funds Commitment/ Expenditure Deadlines||24 months/5 years||24 months/5 years|