HOME Eligible Activities
HOME has four main eligible activities:
- Homeowner (owner-occupied) rehabilitation
- Rental housing acquisition, new construction, or rehabilitation
- Homebuyer housing acquisition, new construction, or rehabilitation, including direct assistance to eligible homebuyers to purchase the housing
- Tenant-based rental assistance (rental subsidy)
OZ investors tend to seek out large-scale projects, to invest substantial capital gains and earn sufficient returns on their investments. PJs should anticipate that OZ investors will be most likely to want to learn more about HOME rental activities. While homeownership investments are not prohibited by the OZ regulations, the long-term nature of an OZ equity investment would become complex in the event the owner needed to sell the property before the investment period is complete. Identifying deals where this could work and explaining the terms to inexperience HOME-assisted homebuyers would be extremely challenging.
HOME rental requirements are described in the Key HOME Rental Housing Requirements Checklist.
Depending on the PJ and the potential project under discussion, HOME PJs may want to explain that the PJ can administer its HOME Program activities itself, or it can partner with state recipients, subrecipients, or contractors. HOME PJs can also directly work with owners, nonprofit or for-profit developers, or sponsors to carry out HOME activities. There is a minimum 15 percent set-aside of each annual allocation for PJs to use for housing that is owned, developed, or sponsored by CHDOs.
Rental Housing
While HOME can fund a range of eligible activities, OZ investors will want to know, in particular, about rental housing since rental housing is the most likely affordable housing vehicle for OZ equity investments.