Affordability, Property Standards, and Other Federal Requirements Applicable to HTF Projects
To ensure housing affordability over time, HTF-assisted housing is subject to income and rent restrictions for an affordability period of 30 years.
All HTF-assisted units must be occupied by income-eligible households. The specific HTF income restrictions vary based on the total HTF funds available.
- In any fiscal year in which the total HTF funds available are less than $1 billion, 100 percent of a grantee’s HTF funds must benefit ELI households or households at or below the poverty line, whichever is greater.
- the total HTF funds are equal to or exceed $1 billion, 75 percent of a grantee’s HTF funds must benefit ELI households or households with incomes at or below the poverty line, whichever is greater.
Each HTF grantee proposes goals that specify the number of ELI and VLI households to whom rental and homeownership assistance will be provided. The grantee determines the household’s income based on either the part 5 (Section 8) or IRS 1040 definitions of income.
View the HTF income limits for details.
HUD establishes HTF maximum rent standards to ensure affordability for the targeted occupants (ELI and VLI households). The rent standards are issued based on the number of bedrooms. Maximum rent levels include any tenant paid utilities. (This means, the combination of rent plus tenant-paid utilities that a tenant pays cannot be greater than the HUD-issued rent standard for their unit size.)
The grantee establishes maximum monthly allowances for utilities and annually reviews and approves rent schedules proposed by HTF-assisted property owners.
View the HTF rent limits for details.
HTF units must meet the affordability requirements for a period of not less than 30 years. The affordability period begins at project completion. An HTF grantee may impose a longer affordability period based on its allocation plan. The HTF affordability period is generally enforced via use of the state’s recordation laws; typically, this is in the form of a land covenant or deed restriction recorded with the deed to remain in force throughout the affordability period. If the affordability period is terminated prior to completion, the HTF grantee is responsible to repay the HTF investment in the project, based on the failure to complete the affordability requirements.
HTF Affordability Period
The HTF affordability period is a minimum of 30 years. HTF-funded housing must remain affordable to VLI and ELI households for this period. Rent and income restrictions apply throughout this period. Typically, these requirements are enforced through a deed restriction or land covenant.
HTF properties must be maintained in decent, safe, and habitable condition. Upon completion, HTF-assisted properties must meet all applicable codes and standards; during the affordability period, they must meet an ongoing property standard. Potential partners will want to know the specific property standards that apply to their projects.
Newly constructed housing must comply with:
- State and local building codes, or a national building code in their absence
- Energy efficiency standards
- Broadband installation requirements
Grantees must also review and determine that the location of newly constructed rental housing meets site and neighborhood standards that ensure the site is adequate for the proposed project and targeted tenants.
Rehabilitated property must meet grantee-adopted written rehabilitation standards, which incorporate minimum property standards requirements. These include:
- State and local codes and standards for existing structures, or a national code in their absence
- Absence of certain HUD prescribed minimum deficiencies, based on a list of inspectable items and inspected areas from HUD’s UPCS inspection protocol
- Health and safety standards
- Lead-based paint requirements in accordance with 24 CFR part 35, for properties built before 1978
- Broadband infrastructure installation, for substantially rehabilitated rental projects
All projects (newly constructed and rehabilitated) are subject to cross-cutting property standards requirements related to:
- Accessibility for persons with disabilities
- Disaster mitigation
The property standards requirements for HTF also include environmental provisions for rehabilitation and new construction projects.
The applicable codes and standards for HTF are found in the HTF Regulations at 24 CFR 93.301 Property Standards.
The HTF grantee must also establish ongoing property standards for rental housing that will apply throughout the affordability period, per 24 CFR 93.301(e).
Grantees will want to point out to potential OZ investors what steps it takes to ensure these property standards are met. At a minimum, the grantee must approve plans and specifications prior to committing HTF funds and must conduct pre-construction (for rehabilitation), progress, and completion inspections. The grantee must inspect HTF-assisted units during the affordability period, to ensure the standards are met throughout the period of affordability.
Other Federal Requirements Applicable to HTF Projects
HTF projects are subject to several regulations that are cross-cutting for most federal programs. OZ investors will need to be aware of these requirements, and any potential issues they may present. The other federal requirements that apply to HTF projects include:
Discrimination is prohibited in all aspects of the housing.
Units in properties with five or more HTF-assisted rental units must be marketed to those least likely to apply for the housing. The grantee must provide specific guidance to owners about what steps the owner must take to comply.
The HTF property standards requirements include environmental provisions for HTF projects involving new construction and rehabilitation. The HTF requirements are similar to those that apply to the HOME Program but are outcome based and exclude consultation procedures for environmental impacts.
- View the HTF regulations for Environmental Provisions for new construction and rehabilitation under the Property Standards section of the HTF Regulation at 24 CFR 93.301(f)(1) and (2).
- Also, view the HTF Environmental Review Requirements page for additional details. This page summarizes how HTF environmental regulations differ from other CPD programs, and provides a link to Notice CPD-16-14, Requirements for Housing Trust Fund Environmental Provisions.
HTF requires grantees to take all reasonable steps to minimize the displacement of persons as a result of a project assisted with HTF funds. To the extent feasible, displaced residential tenants must be provided a reasonable opportunity to lease and occupy a suitable, decent, safe, sanitary, and affordable dwelling unit in the building/complex upon project completion. View the Real Estate Acquisition and Relocation landing page for details.
Any pre-1978 property is subject to lead-based paint requirements found at 24 CFR part 35, subparts A, B, J, K, and R. This may include notices to workers and residents, use of certified contractors, and lead-paint treatment. Specific requirements depend on the activity and amount of federal assistance. Grantees and potential partners will want to assess their lead-based paint requirements and how these impact cost and time before making a commitment. View the Lead-based Paint landing page for details.
Persons affiliated with the grantee (or its partners) or the owner, developer, or sponsor of housing are prohibited from securing HTF contracts or HTF-assisted units to rent.
HTF grants and all assistance provided to subgrantees and recipients shall be considered a federal award for purposes of the Federal Funding Accountability and Transparency Act of 2006 (FFATA).
HTF funds cannot be used in conjunction with property taken by eminent domain, unless eminent domain is employed only for a public use. Public use may not be interpreted to include economic development that primarily benefits any private entity.