HOME Eligible and Ineligible Costs
Potential OZ partners will want to know how HOME funds can be used. HOME funds can pay for housing hard costs, soft costs, relocation costs, and loan guarantee accounts for housing that is occupied by low-income and VLI households. A PJ may expend, for its own reasonable administrative and planning costs, up to 10 percent of its annual HOME allocation.
There are some specific items that HOME funds cannot pay for. Ineligible costs that are most relevant for discussion with potential partners are:
- Project reserve accounts/operating subsidies
- Rental assistance for existing Section 8 housing
- Assistance to a project previously assisted with HOME funds
- Acquisition of property owned by the PJ (excluding property acquired by the PJ with HOME funds) and delinquent taxes, fees, or other charges for the PJ
- Costs that are not directly allocable to HOME- and HTF-assisted housing, such as commercial space in a mixed-use development or market rate housing units in a mixed-income housing development. This concept is discussed later in this Guidebook, Administrative Requirements.
Educate OZ Investors
PJs will want to educate OZ investors about eligible and ineligible HOME costs. Often, projects include costs that are not HOME-eligible, and developers need to identify a different funding source to pay for those costs.
This list is not exhaustive. View the HOME regulation at 92.214 for a complete list of prohibited activities and costs.