HomeMy WebLinkAboutPR 23187: HOME-ARP POLICY AND PROCEDURE GUIDELINES Citv of - _
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INTEROFFICE MEMORANDUM
Date: June 6, 2023
To: The Honorable Mayor and City Council
Through: Ronald Burton, City Manager
From: Pam Langford, Assistant City Manager - Operations
RE: P. R. #23187
Introduction:
The intent of this Agenda Item is to seek the City Council's approval of P. R. #23187 for the
2021 Home Investment Partnerships American Rescue Plan Program (HOME-ARP)Policy and
Procedure guidelines.
Background of the HOME-ARP Grant:
The Department of Housing and Urban Development allocated $1,000,453.00 to the City of Port
Arthur to address the needs of the homeless and to increase housing stability for very low-
income families.
The HOME-ARP Policies and Procedures establish the guidelines for using HOME-ARP funds
for eligible activities and required documentation per HUD Notice CPD-21-10.
Budget Impact:
The 2021 HOME-ARP is the funding source.
Recommendation:
It is recommended that City Council approve P. R. #23187.
P. R. #23187
05/10/2023 M. Essex
Page 1 of 3
RESOLUTION NUMBER
A RESOLUTION APPROVING THE POLICIES AND PROCEDURES FOR THE
2021 HOME INVESTMENT PARTNERSHIPS AMERICAN RESCUE PLAN
PROGRAM(HOME-ARP)FUNDING FROM THE DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT.
WHEREAS,on March 2021, President Biden signed the American Rescue Plan(ARP)
into law, which provides over$1.9 trillion in relief to address the continued impact of the
COVID-19 pandemic on the economy, public health, State and local governments, individuals,
and businesses; and,
WHEREAS,to address the need for homelessness assistance and supportive services,
Congress appropriated $5 billion in ARP funds to be administered through HOME to perform
four activities that must primarily benefit qualifying individuals and families who are homeless,
at risk of homelessness, or in other vulnerable populations. These activities include (1)the
development and support of affordable housing, (2)tenant-based rental assistance (TBRA), (3)
the provision of supportive services; and (4)the acquisition and development of non-congregate
shelter units; and,
WHEREAS,ARP defines qualifying individuals or families as those that are (1)
homeless, as defined in section 103 (a) of the McKinney-Vento Homeless Assistance Act, as
amended(42 U. S. C. 11302 (a)) ("McKinney-Vento"); (2) at risk of homelessness, as defined in
section 401 of McKinney-Vento; (3) fleeing, or attempting to flee domestic violence, dating
violence, sexual assault, stalking, or human trafficking; (4)part of other populations where
providing supportive services or assistance would prevent a family's homelessness or would
serve those with the greatest risk of housing instability; or(5)veterans and families that include a
veteran family member that meets the criteria in one of(1)-(4) above; and,
WHEREAS, the HOME-ARP Policies and Procedures establish the guidelines for the
use of HOME-ARP funds for eligible activities and the required documentation in accordance
with Notice: CPD-21-10; and,
WHEREAS,the City Council must designate an official to sign all documents
concerning the Policies and Procedures for the 2021 HOME-ARP program, Attachment"A"
based on CPD-21-10,Attachment"B".
P. R. #23187
05/10/2023 M. Essex
Page 2 of 3
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PORT ARTHUR,TEXAS:
THAT the proposed Policies and Procedures for the 2021 HOME-ARP Grant are hereby
approved and adopted by the City Council of Port Arthur to assure compliance with the CPD-21-10
Notice.
THAT the City Manager is designated to sign all documents in connection with the Policy and
Procedure guidelines and,
THAT a copy of the caption of this Resolution be spread upon the minutes of the City Council.
READ,ADOPTED,AND APPROVED this day of
A.D.,2023 at a Regular Meeting of the City Council of the City of Port Arthur,
Texas by the following vote: AYES:
MAYOR
COUNCILMEMBERS
NOES:
Thurman "Bill" Bartie,Mayor
ATTEST:
SHERRI BELLARD
CITY SECRETARY
P. R. #23187
05/10/2023 M. Essex
Page 3 of 3
APPROVED FOR FORM:
Vtikelafy
AL TIZENO
CITY ATTORNEY
APPROVED FOR ADMINISTRATION:
RON BURTON,CITY MANAGER
APPROVED FOR AVAILABILITY OF FUNDS:
KANDY DANI'L, FINANCE DIRECTOR
I
P. R. #23187
05/10/2023 M. Essex
Page 4 of 3
ATTACHMENT "A'
CITY OF PORT ARTHUR
HOME-ARP POLICIES AND PROCEDURES
Introduction
The HOME program was created by the National Affordable Housing Act of 1990. The statutory
purpose of the HOME program is "to increase the number of families served with decent, safe,
sanitary, and affordable housing and expand the long-term supply of affordable housing."
Regulations governing HOME are published in 24 CFR Part 92 (Final Rule, published July 24,
2013 as amended (effective August 23, 2013)).
On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, and on
September 13, 2021 the US Department of Housing and Urban Development (HUD) Community
Planning and Development Division issued Notice CPD-21-10. Notice CPD-21-10 establishes
requirements for HOME-ARP funds appropriated under section 3205 of the American Rescue
Plan Act of 2021 (P.L. 117-2). In addition to Notice CPD-21-10, HUD issued a memorandum
describing waivers and alternative requirements for the HOME-ARP Program.
Subrecipient
A subrecipient is a public agency or nonprofit organization that designs and delivers HOME-ARP
supportive services or programs. A subrecipient is reimbursed for delivering services through
actual program-delivery costs incurred or on a fixed-amount contract. Subrecipient
responsibilities include, but are not limited to:
1. Determining eligibility for HOME-ARP supportive services or programs.
2. Assessing the need for supportive services and developing a housing stability plan with
HOME-ARP qualifying populations.
3. Determining how services will be delivered to HOME-ARP qualifying populations in
accordance with HOME-ARP program requirements (see Notice: CPD-21-10).
4. Delivering services following subrecipient-defined policies and procedures that ensure
compliance with HOME-ARP regulatory requirements.
Program Delivery Costs for Supportive Services
Program delivery costs are those that are directly attributable to the delivery of HOME-ARP
supportive services to an identified HOME-ARP supportive services beneficiary and include:
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1. The portion of labor, supplies, and materials incurred to directly provide supportive
services to program participants; and
2. The portion of salary and benefits of staff who directly deliver supportive services to
HOME-ARP program participants.
HOME-ARP Qualifying Populations
HOME-ARP funds must benefit individuals and families who meet the definition of a qualifying
population (QP), including veterans and families that include a veteran family member.
Qualifying Population Definitions
To meet the definition of a HOME-ARP qualifying population (QP) in the City of Port Arthur
HOME-ARP program, an individual or family must be homeless or a vulnerable population as
defined by HUD specifically for the HOME-ARP program:
1. Homeless;
2. At risk of homelessness;
3. Fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking
or human trafficking; or
4. An "other" qualifying population.
Homeless
For the purposes of the HOME-ARP program, homeless means meeting one of the following
three definitions:
1. An individual or family who:
a. Has a primary nighttime residence that is a public or private place not designed
for or ordinarily used as a regular sleeping accommodation for human beings,
including a car, park, abandoned building, bus or train station, airport, or
camping ground; or
b. Is living in a supervised publicly or privately operated shelter designated to
provide temporary living arrangements (including congregate shelters,
transitional housing, and hotels and motels paid for by charitable organizations
or by federal, state, or local government programs for low-income individuals);
c. Is exiting an institution where he or she resided for 90 days or less and who
resided in an emergency shelter or place not meant for human habitation
immediately before entering that institution.
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2. An individual or family who will imminently lose their primary nighttime residence,
provided that:
a. The primary nighttime residence will be lost within 14 days of the date of
application for assistance; and
b. No subsequent residence has been identified; and
c. The individual or family lacks the resources or support networks, e.g., family,
friends, faith-based, or other social networks needed to obtain other permanent
housing.
3. Families with children and youth, or unaccompanied youth under 25 years of age, who
do not otherwise qualify as homeless as defined in 1 or 2 above, but who:
a. Are defined as homeless under section 387 of the Runaway and Homeless Youth
Act (42 U.S.C. 5732a), section 637 of the Head Start Act (42 U.S.C. 9832), section
41403 of the Violence Against Women Act of 1994 (42 U.S.C. 14043e-2), section
330(h) of the Public Health Service Act (42 U.S.C. 254b(h)), section 3 of the Food
and Nutrition Act of 2008 (7 U.S.C. 2012), section 17(b) of the Child Nutrition Act
of 1966 (42 U.S.C. 1786(b)), or section 725 of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11434a);
b. Have not had a lease, ownership interest, or occupancy agreement in permanent
housing at any time during the 60 days immediately preceding the date of
application for homeless assistance;
c. Have experienced persistent instability as measured by two moves or more
during the 60-day period immediately preceding the date of applying for
homeless assistance; and
d. Can be expected to continue in such status for an extended period of time
because of:
i. Chronic disabilities;
ii. Chronic physical health or mental health conditions; iii.
Substance addiction;
iv. Histories of domestic violence or childhood abuse or neglect;
v. The presence of a child or youth with a disability; or
vi. Two or more of the following barriers to employment:
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1. Lack of a high school degree or General Educational Development
(GED);
2. Illiteracy;
3. Low English proficiency;
4. History of incarceration or detention for criminal activity; 5. A
history of unstable employment.
At Risk of Homelessness
For the purposes of the CITY HOME-ARP program, at risk of homelessness means meeting one
of the following two definitions:
1. An individual or family who:
a. Has an annual income below 30 percent of median family income, adjusted for
household size, for the area, as determined by HUD; and
b. Does not have sufficient resources or support networks, e.g., family, friends,
faith-based or other social networks, immediately available to prevent them
from moving to an emergency shelter or a public or private place not meant for
use as a regular sleeping accommodation by human beings; and
c. Meets one of the following conditions:
i. Has moved because of economic reasons two or more times during the
Sixty (60) days immediately preceding the application for homeless
assistance; ii. Is living in the home of another because of economic hardship;
iii. Has been notified in writing that their right to occupy their current
housing or living situation will be terminated within 21 days after the
date of application for assistance;
iv. Lives in a hotel or motel, and the cost of the hotel or motel stay is not
paid by charitable organizations or by federal, State, or local government
programs for low-income individuals;
v. Lives in a single-room occupancy or efficiency apartment unit in which
there reside more than two persons or lives in a larger housing unit in
which there reside more than 1.5 people per room, as defined by the U.S.
Census Bureau; or vi. Is exiting a publicly funded institution or system
of care (such as a health-care facility, a mental health facility, foster care
or other youth facility, or correction program or institution).
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2. A child or youth who does not qualify as homeless as defined above but qualifies as
homeless because they are:
a. An individual under 18 years of age who cannot live safely with a parent, legal
guardian, or relative and has no other safe alternative living arrangement.
b. An individual who has a primary nighttime residence that provides a temporary
residence for individuals intended to be institutionalized or has a temporary
accommodation for not more than 90 days in the residence of another
individual.
Fleeing or Attempting to Flee Domestic Violence, Dating Violence, Sexual Assault, Stalking, or
Human Trafficking
For the HOME-ARP program, this QP includes any individual or family who is fleeing or is
attempting to flee, domestic violence, dating violence, sexual assault, stalking, or human
trafficking. There is no requirement that individuals and families also meet the HOME-ARP
definition of homeless, at risk of homelessness, or "other"qualifying population.
This population includes cases where an individual or family reasonably believes that there is a
threat of imminent harm from further violence due to dangerous or life-threatening conditions
that relate to violence against the individual or a family member, including a child, that has
either taken place within the individual's or family's primary nighttime residence or has made
the individual or family afraid to return or remain within the same dwelling unit.
In the case of sexual assault, this also includes cases where an individual reasonably believes
there is a threat of imminent harm from further violence if the individual remains within the
same dwelling unit that the individual is currently occupying or the sexual assault occurred on
the premises during the 90-day period preceding the date of the request for assistance.
Domestic Violence
Domestic violence includes felony or misdemeanor crimes of violence committed by:
1. A current or former spouse or intimate partner of the victim (the term "spouse or
intimate partner of the victim" includes a person who is or has been in a social
relationship of a romantic or intimate nature with the victim, as determined by the
length of the relationship, the type of the relationship, and the frequency of interaction
between the persons involved in the relationship);
2. A person with whom the victim shares a child in common;
3. A person who is cohabitating with or has cohabitated with the victim as a spouse or
intimate partner;
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4. A person similarly situated to a spouse of the victim under the domestic or family
violence laws of the State or City; or
5. Any other person against an adult or youth victim who is protected from that person's
acts under the domestic or family violence laws of the State or the City.
Dating Violence
Dating violence means violence committed by a person who is or has been in a social
relationship of a romantic or intimate nature with the victim; and where the existence of the
relationship is determined considering:
1. The length of the relationship;
2. The type of relationship; and
3. The frequency of interaction between the persons involved in the relationship.
Sexual Assault
Sexual assault means any nonconsensual sexual act proscribed by Federal, Tribal, or State law,
including when the victim lacks the capacity to consent.
Stalking
Stalking means engaging in a course of conduct directed at a specific person that would cause a
reasonable person to:
1. Fear for the person's individual safety or the safety of others; or
2. Suffer substantial emotional distress.
Human Trafficking
For the purposes of the HOME-ARP program, human trafficking includes both sex and labor
trafficking, defined as:
1. For sex trafficking, the recruitment, harboring, transportation, provision, obtaining,
patronizing, or soliciting of a person for the purpose of a commercial sex act, in which
the commercial sex act is induced by force, fraud, or coercion, or in which the person
induced to perform such act has not attained 18 years of age.
2. For labor trafficking, the recruitment, harboring, transportation, provision, or obtaining
of a person for labor or services through the use of force, fraud, or coercion for the
purpose of subjection to involuntary servitude, peonage, debt bondage, or slavery.
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"Other" Qualifying Population
For the purposes of the HOME-ARP program, "other" QP means individuals and families who do
not meet the definition of homeless, at-risk of homelessness, or fleeing or attempting to flee
domestic violence, dating violence, sexual assault, stalking or human trafficking as defined
above and:
1. Requiring services or housing assistance to prevent repeat homelessness; or
2. At greatest risk of housing instability.
'8 Households Requiring Services or Housing Assistance to Prevent Repeat Homelessness
Households may receive HOME-ARP supportive services or housing assistance as a HOME-ARP
QP if they:
1. Previously qualified as homeless as defined above, or previously qualified as homeless
because:
a. The individual or family was fleeing, or attempting to flee, domestic violence,
dating violence, sexual assault, stalking, or other dangerous or life-threatening
conditions that relate to violence against the individual or family member,
including a child, that has either taken place within the individual's or family's
primary nighttime residence or has made the individual or family afraid to return
to their primary nighttime residence; and
b. Have no other residence; and
c. Lack the resources or support networks, such as family, friends, faith-based or
other social networks, to obtain other permanent housing; and
2. Are currently housed with temporary or emergency assistance, including financial
assistance, services, temporary rental assistance or some type of other assistance to
allow the household to be housed; and
3. Need additional housing assistance or supportive services to avoid a return to
homelessness.
Households at Greatest Risk of Housing Instability
Households are at the greatest risk of housing instability and a HOME-ARP QP when they meet
one of the following two definitions:
1. Have an annual income that is less than or equal to 30% of the AMI and paying more
than 50%of monthly household income toward housing costs (are severely cost
burdened); or
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2. Have an annual income that is less than or equal to 50% of the AMI, and meet one of
the following conditions:
a. Moved because of economic reasons two or more times during the 60 days
immediately preceding the application for homelessness prevention assistance;
b. Living in the home of another because of economic hardship;
c. Have been notified in writing that their right to occupy their current housing or
living situation will be terminated within 21 days after the date of application for
assistance;
d. Lives in a hotel or motel, and the cost of the hotel or motel stay is not paid by
charitable organizations or by Federal, State, or local government programs for
low-income individuals;
e. Lives in a single-room occupancy or efficiency apartment unit in which there
reside more than two persons or lives in a larger housing unit in which there
reside more than 1.5 persons reside per room, as defined by the U.S. Census
Bureau; or
f. Is exiting a publicly funded institution or system of care (such as a health-care
facility, a mental health facility, foster care or another youth facility, or
correction program or institution).
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Rental Housing and Tenant Based Rental Assistance (TBRA)
HOME-ARP funds may be used to acquire, rehabilitate, or construct affordable rental housing,
primarily for occupancy by households of individuals and families that meet the definition of
one or more of the qualifying populations.
TBRA may be used to provide tenant-based rental assistance to qualifying households. In
HOME-ARP Tenant-Based Rental Assistance, assistance is given to qualifying households with
payments to cover the entire or insufficient amounts that the qualifying housing cannot pay for
housing and housing-related costs, such as rental assistance and security, and utility deposits.
TBRA projects will follow the City's TBRA Policies and Procedures. The Policy and Procedure will
include the tenant selection process and program participation eligibility.
HOME-ARP funds can only be invested in units restricted for qualifying households or low-
income households as follows:
1. Not less than 70 percent of the total number of rental units assisted with HOME-ARP
funds must be restricted for occupancy by households that are qualifying households at
the time of the household's initial occupancy; and
2. Not more than 30 percent of the total number of rental units assisted with HOME-ARP
funds may be restricted to low-income households. These rental units do not have to
be restricted for occupancy by qualifying households; however, rental units restricted to
low-income households are only permitted in projects that include HOME-ARP units for
qualifying households.
Eligible Property Types
HOME-ARP rental housing eligible property types are:
1. Site-built single-unit and multi-unit housing;
2. Manufactured housing;
3. Single Room Occupancy (SRO) units.
Ineligible Property Types
HOME-ARP funds may not be used to rehabilitate public housing units. In addition, unless
acquired and rehabilitated to HOME-ARP rental housing, the following property types are
ineligible as HOME-ARP rental housing:
1. Emergency shelters;
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2. Hotels, and motels;
3. Facilities such as nursing homes;
4. Residential treatment facilities;
5. Correctional facilities;
6. Halfway houses; and
7. Housing for students or dormitories.
Forms of Assistance
HOME-ARP funds for rental housing will be provided as a non-interest bearing, non-amortizing
loan, subject to recapture in the event of non-compliance with HOME-ARP requirements and
forgivable upon the expiration of the HOME-ARP minimum compliance period.
Minimum and Maximum HOME-ARP Development Investment
The minimum HOME-ARP investment is $1,000 per HOME-ARP unit. There is no maximum
HOME-ARP investment - HOME-ARP funds may pay the entire reasonable and necessary cost to
acquire, rehabilitate and/or construct HOME-ARP rental units subject to any restrictions
specified by the CITY and the Cost Principles at 2 CFR Part 200.
Eligible Costs
HOME-ARP funds may be used to pay for up to 100% of the following eligible costs associated
with the acquisition, development, and operation of HOME-ARP rental units:
1. Hard costs;
2. Refinancing
3. Acquisition
4. Project Soft Costs
5. Relocation costs
6. Costs relating to the payment of loans
7. Operating Cost Assistance
Property Standards: HOME-ARP rental units must comply with all property standards
applicable to rental projects required in 24 CFR 92.251 paragraphs (a) new construction, (b)
rehabilitation projects, (c) (1) and (2) acquisition of standard housing, ( e) manufactured
housing, and (f) on-going property condition standards.
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Supportive Services
HOME-ARP funds may be used to provide a broad range of supportive services to qualifying
individuals or families as a separate activity or in combination with other HOME-ARP activities
Supportive Services Project Delivery Costs
Service providers are compensated through project delivery costs. General administrative
funding is not available for the CITY to pass through to service providers. A supportive services
project delivery cost is one that can be directly attributed to the delivery of a specific HOME-
ARP service to an identified and eligible HOME-ARP program participant. When a service
provider is engaged directly in the provision of HOME-ARP supportive services to identified
HOME-ARP program participants, the labor (including salary and benefit packages of staff),
supplies, and materials incurred in directly providing the supportive services are reimbursable
project delivery costs.
Eligible McKinney-Vento Services
CITY HOME-ARP funding is available for the following eligible McKinney-Vento services for
qualifying populations that are 1) homeless or 2) at risk of homelessness, including those who
are occupants or prospective occupants of HOME-ARP NCS and tenants or prospective tenants
of HOME-ARP rental housing. McKinney-Vento supportive services may only be offered to
households (individuals or families) that meet the definition of a homeless or at-risk of
homeless qualifying population at the time of application for services. Eligibility must be
documented prior to providing HOME-ARP-funded services.
1. Child care, including providing meals and snacks and comprehensive and coordinated
developmental activities.
2. Education services to improve knowledge and basic educational skills
3. Employment assistance and job training
4. Food
5. Housing search and counseling services: Housing Counseling surrounding the following
topics are ineligible under HOME-ARP:
• Resolving or preventing mortgage delinquency, including, but not limited to,
default and foreclosure, loss mitigation, budgeting, and credit;
• Home maintenance and financial management for homeowners, including, but
not limited to, Escrow funds, budgeting, refinancing, home equity, home
improvement, utility costs, energy efficiency, rights and responsibilities of
homeowners, and reverse mortgages.
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6. Legal services
7. Life skills training
8. Mental health services
9. Outpatient health services provided by licensed medical professionals to treat medical
conditions
10. Outreach services;
11. Substance abuse treatment services by licensed or certified professionals to prevent,
reduce, eliminate, or deter relapse of substance abuse or addictive behaviors
12. Transportation —mileage reimbursement will follow the U. S. General Services
Administration (GSA) guidelines for the effective date of January 1, 2023.
13. Case management, including assessing, arranging, coordinating, and monitoring the
delivery of individualized services to meet the needs of program participant(s)
14. Mediation
15. Credit repair
16. Landlord/Tenant Liaison services between property managers/owners and program
participants
17. Services for special populations
18. Financial assistance costs
Selection of Program Participants
Prior to providing supportive services to any individual or family, an eligibility assessment must
be conducted to identify needed and existing services. The assessment must:
1. Document how the individual or family meets the definition of a HOME-ARP qualifying
population, and specify the category of the qualifying population met;
2. Identify and document any services already being received by the individual or family.
Only services that are not currently being received by the individual or family may be
provided using HOME-ARP funds. Services provided through another source may not be
terminated in order to provide HOME-ARP-funded services.
Waiting List and Due Process Procedures
Recipients must maintain a waiting list of individuals and families wishing to apply for HOME-
ARP supportive services. Individuals and families wishing to apply for services must provide
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complete information necessary to placement on the services waiting list. This information
includes name and contact information (phone, email, street address, if available).
Placement on the waiting list does not indicate the family will be eligible for assistance—a final
determination of eligibility will be made when the family is selected from the waiting list. When
the family nears the top of the waiting list, the service provider will verify eligibility for services
and develop a services plan.
Denial of Assistance
The service provider will deny assistance to applicants who:
1. Do not meet any one or more of the eligibility criteria.
2. Do not supply the required information or documentation.
3. Fail to respond to a written request for information or a request to declare their
continued interest.
4. Fail to complete any aspect of the application, eligibility interview, or services action
plan that the service provider may require.
5. Currently receive the same services from another source.
6. Have engaged in or threatened abusive or violent behavior towards any service provider
staff member.
Termination of Assistance
The City of Port Arthur may terminate assistance to a program participant who violates
program requirements or conditions of occupancy or no longer needs the services as
determined by the City. Termination under this section does not bar the City from providing
further assistance at a later date to the same individual or family under the HOME-ARP
Program.
1. The family may terminate services at any time.
2. The service provider may fully or partially terminate services assistance when:
a. The service provider determines that there is insufficient funding in their contract to
support continued assistance for families in the program.
b. The service provider determines the family no longer needs the services.
c. The family is receiving services from another source.
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d. The family has reached any monetary or time limits for receipt of services.
e. The family fails to provide any information that the service provider, the CITY, or
HUD determines is necessary for the administration of the program, including but
not limited to any requested certification, release, consent form, or other
documentation, Social Security Numbers; and signed consent forms for obtaining
information.
f. The family fails to keep appointments.
g. A family member violates any family obligations under the program, including failing
to comply, without good cause, with the services contract of participation.
h. Any family member has engaged in or threatened abusive or violent behavior
toward service provider personnel or any contracted services on behalf of the
service provider. Abusive or violent behavior includes verbal as well as physical
abuse or violence, use of racial epithets, or other language, written or oral, that is
customarily used to intimidate. Threatening refers to oral or written threats or
physical gestures that communicate intent to abuse or commit violence.
i. A family member commits fraud, bribery, or other corrupt or criminal acts in
connection with the program.
Due Process and Hearing Procedures
When the service provider makes a decision to deny or terminate services to an applicant or
participant, the family is entitled to appeal the decision. The appeal takes the form of an
Informal Hearing.
The process, at a minimum, must consist of:
1. Providing the program participant with a written copy of the program rules and the
termination process before the participant begins to receive assistance;
2. Written notice to the program participant containing a clear statement of the reasons
for termination;
3. A review of the decision, in which the program participant is given the opportunity to
present written or oral objections before a person other than the person (or a
subordinate of that person) who made or approved the termination decision; and
4. Prompt written notice of the final decision to the program participant.
During the termination process, effective communication and accessibility for individuals
with disabilities, including the provision of reasonable accommodations. Similarly,
accommodation must be provided to persons with Limited English Proficiency.
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Compliance with Federal Cross-cutting Regulations
HOME-ARP applicants, subrecipients, service providers, and owners must comply with the
following statutes, policies, and procedures.
Accessibility Standards
All HOME-ARP activities and projects must comply with the accessibility standards of the
Americans with Disabilities Act, The Fair Housing Act, and the Rehabilitation Act, as revised.
Asbestos Testing
Recipients must comply with Federal and State requirements to protect affected public
members from exposure to regulated asbestos-containing material during renovation,
demolition, removal, transport, and disposal activities in accordance with applicable
Environmental Protection Agency (EPA) regulations.
Affirmative Marketing
Owners of assisted rental housing containing five (5) or more total units must adhere to the
CITY Affirmative Marketing requirements. Actions must be taken to provide equal access to all
eligible persons in the housing market area with a focus on those least likely to apply.
Affirmative marketing procedures are required to be submitted with the application.
Conflicts of Interest
Both Federal and State laws prohibit employees, agents, consultants, officers or elected
officials of entities receiving government funds from obtaining a financial interest or benefit
from a government-assisted activity, having an interest in any contract, subcontract or
agreement with respect to any contract during their tenure and for one (1) year thereafter. In
the HOME-ARP program,this requirement includes the State of City, owners, service providers
and recipients. These requirements are also applicable to persons to whom the above-
identified parties have family or business ties.
Contract Work Hours and Safety Standards Act
Requires that projects with twelve (12) or more HOME-ARP assisted units comply with overtime
provisions of the Act. Overtime provisions apply to the entire development, not just the
HOME-ARP assisted units and the provisions must be in the construction contract. Payroll
records must be provided to CITY weekly. The CITY Labor Standards Handbook should be used.
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Labor Standards (Davis-Bacon Act)
Requires that a contract for construction with twelve (12) or more HOME-ARP assisted units to
pay all laborers and mechanics not less than the wages prevailing in that locality as
predetermined by the U.S. Department of Labor. Prevailing wages must be paid on the entire
' development, not just the HOME-ARP-assisted units, and the wage provisions must be in the
construction contract. Payroll records must be provided to CITY weekly. The CITY Labor
Standards Handbook should be used.
Drug-Free Workplace
Recipients are required to certify and maintain a drug-free workplace.
Environmental Review
The environmental effects of each activity carried out with Federal funds must be assessed
following Part 58 HUD Environmental Review requirements.
The acquisition of property or any physical action taken on a proposed site prior to the
completion of the environmental review will preclude the award of HOME-ARP funds to a
project or activity, regardless of the source of funds used.
HUD Format Environmental Review requirements generally require between thirty (30) and
one hundred twenty (120) days to complete, depending upon the type of activity and its
location. Applicants must consult with the State Historic Preservation Officer ("SHPO"),
including the Tribal Historic Preservation Officer.
Equal Opportunity and Fair Housing
Multiple Acts, Orders, and Regulations must be followed to ensure equal access to HOME-ARP
activities. These include:
1. The Fair Housing Act and implementing regulations at 24 CFR 100;
2. 24 CFR 110 requiring fair housing posters be prominently displayed so they are apparent
to all persons seeking housing accommodations;
3. Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender
Identity Final Rule;
4. Executive Order 12259 - Equal Opportunity in Housing;
5. Title VI of the Civil Rights Act of 1964 (24 CFR 1)—Nondiscrimination in Federally
Assisted Programs;
16 1 Page
6. Age Discrimination Act of 1975 (25 CFR 146);
7. Section 504 of the Rehabilitation Act (24 CFR 8); and
8. Executive Order 11246 - Equal Employment Opportunity.
Financial Records and Audits
Recipients must comply by ensuring that financial records can be audited based on Generally
Accepted Accounting Principles; internal controls are effective and protect federal funds from
inappropriate use; procedures exist for determining costs are allowable, reasonable, and
allocable; and systems are in place to review procedures. The CITY may require evidence that
the recipient's financial management system complies with 2 CFR 200, and may require the
most recent audit be submitted for review.
Flood Insurance
Section 202 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4106) requires that Federal
funds not be provided to an area that has been identified by the Federal Emergency
Management Agency ("FEMA") as having special flood hazards unless the community is
participating in the National Flood Insurance Program or it has been less than one (1) year since
the community was designated as having special flood hazards and flood insurance is obtained.
HUD Performance Measures
The recipient must provide performance measurement data as prescribed by HUD and submit
such data to CITY upon request. The performance measurements will be reported in the
Consolidated Annual Performance Evaluation Report and may be incorporated into any
Consolidated Plan update and corresponding Annual Action Plan. HUD guidance will be issued
in the near future.
Lead Hazard Control
The Lead Safe Housing Rule ("LSHR") 24 CFR Part 35 applies to HOME-ARP rental housing and
non-congregate shelter activities. Depending on the nature of the work and the dollar amount
of HOME-ARP funding, certain requirements must comply with regard to lead-based paint
inspection, risk assessment, and handling lead-based paint. The use of a certified abatement
contractor is required.
Minority and Women Business Enterprises
Recipients must make efforts to include, to the maximum extent possible, minorities and
women and entities owned by minorities and women in all contract activity. Recipients are
17IPage
contractually obligated to maintain documentation and data on the steps taken to implement
outreach programs to minority-owned and women-owned businesses, including data indicating
the racial, ethnic, or gender characteristics of each business entity receiving a contract or
subcontract to be paid with HOME-ARP funds;the amount of the contract or subcontract; and
documentation of the steps to assure that minority- and women-owned business enterprises
have an equal opportunity to obtain or compete for contracts and subcontracts as sources of
supplies, equipment, construction, and services.
Procurement and Contracting
All recipient procurement must comply with the Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards at 2 CFR 200. Any procurement that did
not incorporate federal labor standards or Section 3 employment opportunities requirements
will be invalid. Construction contractors must have the appropriate license and insurance for
the type of work being performed. Contractors and participants must not be debarred,
suspended, or ineligible based on the excluded parties list.
Section 3 Economic Opportunities
When HOME-ARP and any other covered Section 3 project assistance is $200,001 or greater,
recipients, contractors and subcontractors must track project labor hours, including those
worked by Section 3 workers and targeted Section 3 workers, and take actions to provide
opportunities for Section 3 businesses to participate in funded projects
Uniform Relocation Assistance and Real Property Acquisition Policies Act ("URA")
The URA provides important protections and assistance for people affected by the acquisition,
rehabilitation or demolition of real property for federally funded projects. This law ensures
that people whose real property is acquired, or who move as a direct result of projects
receiving Federal funds, are treated fairly and equitably and receive assistance in moving from
the property they occupy. All voluntary and involuntary acquisitions, and any relocation, must
comply with the URA. HUD Handbook 1378 provides detailed information regarding URA
requirements.
Violence Against Women Act (VAWA)
The Violence Against Women Act (VAWA) provides expanded protections to victims of domestic
violence, dating violence, sexual assault, and stalking across HUD housing and homelessness
programs. Generally, applicants, occupants, service participants, and tenants may not be
denied assistance or have assistance terminated on the basis of or as a direct result of their
status as a victim.
18IPage
Written Agreements
Before disbursing HOME-ARP funds to any entity, the CITY will enter into a written agreement
with that entity. The agreement will commit only to providing HOME-ARP funds during the
HOME-ARP budget period. The content of the written agreement will vary depending upon the
type of entity and the activity being implemented.
All agreements, regardless of activity, will include:
1. Required compliance with federal cross-cutting regulations, including Uniform
Administrative Requirements;
2. Uses of HOME-ARP and other funds for the specified activity;
3. Affordability requirements of rental housing
4. Program income retention or return to CITY;
5. Requirement that funds not be disbursed until needed for payment of eligible costs,
that each payment request be limited to only the amount needed, and that program
income, if any, must be disbursed prior to requesting additional funds from the CITY;
6. Records and reports that must be maintained and submitted;
7. Means of enforcement of program requirements;
8. Means of enforcement of the agreement; and
9. Duration of the agreement.
For rental housing projects, the written agreement will also include:
1. The address of the project or legal description of the property if a street address has not
been assigned to the property;
2. Required project tasks;
3. A complete budget;
4. Ongoing compliance with rental housing requirements, including repayment of
HOMEARP funds in the event of non-compliance;
5. On-site inspections and financial oversight requirements;
6. Tenant selection; and
7. Project-specific waiting list.
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Record keeping Requirements
Each subrecipient and project owner must establish and maintain sufficient records to enable
HUD to determine whether the CITY has met the HOME-ARP requirements. At a minimum, the
following records must be maintained for each HOME-ARP activity.
Supportive Services
Program participant information must maintain:
1. Documentation supporting the eligibility of each beneficiary as:
a. Homeless or at risk of homelessness;
b. Fleeing or attempting to flee domestic violence, dating violence, sexual assault,
stalking, or human trafficking; or
c. Other HOME-ARP eligible population.
2. Evidence of the expenditure of HOME-ARP funds only for eligible costs and the program
participant will receive only HOME-ARP services needed so there is no duplication of
services or assistance in the use of HOME-ARP funds for supportive services.
3. Records, where applicable, demonstrate compliance with the assistance termination
requirements.
4. Records of all solicitations of and agreements with subrecipients and contractors.
5. Records of all payment requests by and dates of payments made to subrecipients and
contractors.
6. Records of all procurement contracts and documentation of compliance with
procurement requirements.
7. Records evidencing the use of the written procedures in selecting program participants
for and providing supportive services.
8. Records of all leases, subleases, and financial assistance agreements for the provision of
rental payments.
9. Documentation of payments made to owners for rental payments, and supporting
documentation for these payments, including dates of occupancy by qualifying
individuals and families.
10. Records of the types of services provided under the program and the amounts spent on
these services.
20IPage
11. For any HOME-ARP Housing Counseling Services, records must be maintained in
accordance with the Housing Counseling Final Rule.
Rental Housing
Unit occupant information must be maintained for each qualifying household that meets the
HOME-ARP definition of homeless or at-risk of homelessness subject to confidentiality
requirements, and the following additional records must be maintained:
1. Evidence of the commitment and expenditure of all funds necessary to complete the
project.
2. Evidence of the expenditure of HOME-ARP funds only for eligible costs.
3. Records (e.g., inspection reports) demonstrating that each HOME-ARP rental unit and
project meets the property standards at project completion and through the applicable
minimum compliance period.
4. Records demonstrating compliance with operating cost assistance reserve management
and oversight.
5. Documentation of annual household income to determine eligibility for occupancy
and/or the tenant contribution to rent, including:
a. Source documents for the assets held by the household and income received
over the most recent period for which representative data is available before the
date of the evaluation (e.g., wage statement, unemployment compensation
statement, public benefits statement, bank statement);
b. To the extent that source documents are unobtainable, a written statement by
the relevant third party (e.g., employer, government benefits administrator) or
the written certification by the recipient's or subrecipient's intake staff of the
oral verification by the relevant third party of the income the household received
over the most recent period for which representative data is available; or
c. To the extent that source documents and third-party verification are
unobtainable, the written certification by the household of the amount of
income the household received for the most recent period representative of the
income that the household is reasonably expected to receive over the 3-month
period following the evaluation.
6. Records demonstrating continued compliance with HOME-ARP rental requirements.
7. Leases and other documents demonstrating compliance with tenant selection and
tenant protection requirements.
211Page
8. Records that document the monthly allowance for utilities (excluding telephone) used
to determine compliance with the rent restriction.
9. Records demonstrating compliance with the return of the HOME-ARP rental capitalized
operating cost assistance reserve at the end of the compliance period.
10. Records demonstrating that each HOME-ARP rental housing unit and project meets the
rent limitations for the 15-year minimum compliance period. Records must be kept for
each household assisted.
11. Records demonstrating that a site and neighborhood standards review was conducted
for each HOME-ARP rental housing project involving new construction.
12. Purchase contract.
13. Closing documents.
14. Settlement statement and title work for acquisitions.
15. Appraisal or other estimation of value.
16. Architectural and engineering contracts and completed designs, plans, and
specifications for rehabilitation and new construction activities.
17. Invoices, pay requests, and proof of payment for all project expenditures.
18. Proof of insurance.
19. Project and program audits.
Financial Records
1. Records identifying the source and application of program income and repayments.
2. Records demonstrating adequate budget control and other records required by the
uniform administrative requirements, including evidence of periodic account
reconciliations.
Program Administration Records
1. Records demonstrating compliance with the applicable uniform administrative
requirements.
2. Records documenting required inspections, monitoring reviews and audits, and the
resolution of any findings or concerns.
22IPage
Cross-cutting Regulations and Requirements Records
1. Records demonstrating compliance with nondiscrimination, equal opportunity, and fair
housing requirements.
2. Data on the extent to which each racial and ethnic group and single-headed households
by gender of household head) have applied for, participated in or benefited from
HOME-ARP funds.
3. Records demonstrating compliance with affirmative marketing procedures and
requirements.
4. Documentation and data on the steps taken to outreach to minority-owned (MBE) and
female-owned (WBE) businesses, including:
a. Data indicating the racial/ethnic or gender character of each business entity
receiving a contract or subcontract of$25,000 or more paid, or to be paid, with
HOME-ARP funds; and
b. The amount of the contract or subcontract.
5. Records demonstrating compliance with the environmental review requirements,
including flood insurance requirements.
6. Records demonstrating compliance with the requirements regarding displacement,
relocation, and real property acquisition, including but not limited to:
a. Project occupancy lists identifying the name and address of all persons:
i. Occupying the real property on the date of the initiation of negotiations
or application for HOME-ARP funds, whichever is earlier;
ii. Moving into the property on or after the date of the initiation of
negotiations or application for HOME-ARP funds; and
iii. Occupying the property upon completion of the project.
b. Lists of all individuals or families occupying hotels and motels and other
nonresidential properties acquired, rehabilitated, and/or demolished and newly
constructed to become HOME-ARP NCS or HOME-ARP rental housing that qualify
for assistance as members of a qualifying population, including records indicating
whether such persons were assisted by the HOME-ARP program following the
closure of the nonresidential properties because of HOME-ARP activities.
c. Lists of all individuals or families occupying HOME-ARP NCS that were converted
to HOME-ARP rental housing that qualify for assistance, including:
231Page
i. Records indicating whether moving costs or advisory services were
provided as part of HOME-ARP administrative costs or under the HOME-
ARP supportive services activity; and ii. Records indicating whether such
persons were assisted by the HOME-ARP program following the conversion
of the HOME-ARP NCS units.
7. Records demonstrating compliance with the labor requirements, including contract
provisions and payroll records.
8. Records demonstrating compliance with the lead-based paint requirements.
9. Records supporting compliance with conflict of interest requirements.
10. Records demonstrating compliance with debarment and suspension requirements.
11. Records of emergency transfers requested by victims of domestic violence, dating
violence, sexual assault, or stalking, including data on the outcomes of those requests.
12. Records documenting compliance with 2 CFR 200 regarding financial management and
procurement.
13. Documentation of actions undertaken to meet Section 3 requirements.
Records Retention Period
All records pertaining to HOME-ARP funds must be retained for five years after contract
closeout, except:
1. For HOME-ARP rental housing projects:
a. Records pertaining to the development phase must be retained for five years
after the project completion date;
b. Records of individual tenant income verifications, project rents and project
inspections must be retained for the most recent five-year period, until five
years after the minimum compliance period terminates.
2. Written agreements must be retained five years after the agreement terminates.
3. Records covering displacements and acquisition must be retained for five years after the
date by which all persons displaced from the property and all persons whose property is
acquired for the project have received the final payment to which they are entitled.
4. If any litigation, claim, negotiation, audit, monitoring, inspection, or other action is
started before the expiration of the required record retention period, records must be
retained until completion of the action and resolution of all issues which arise from it, or
until the end of the required period, whichever is later.
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Confidentiality
All HOME-ARP subrecipients, owners, and contractors must develop, implement, and maintain
written procedures to ensure that:
1. All records containing personally identifying information of any individual or family who
applies for and/or receives HOME-ARP assistance will be kept secure and confidential;
2. The address or location of any NCS or HOME-ARP rental housing exclusively for
individuals fleeing or attempting to flee domestic violence, dating violence, sexual
assault, stalking, or human trafficking will not be made public, except as necessary
where making the address or location public does not identify occupancy of the NCS or
HOME-ARP rental housing, including recording of use restrictions or restrictive
covenants, or with written authorization of the person or entity responsible for the
operation of the NCS or HOME-ARP rental housing; and
3. The address or location of any program participant that is a fleeing or attempting to flee
domestic violence, dating violence, sexual assault, stalking, or human trafficking will not
be made public.
The recipient may create a program participant identifier code or number that can be used on a
file and maintained internally in such a way that the number itself does not inadvertently
identify the program participant (i.e., no use of initials, date of birth, or other pieces of
information that might suggest the identity of the program participant). The "key" or "cypher"
for the program participant identifier code would itself be confidential and would not leave the
provider.
In the circumstance of HUD programs, the Unique Personal Identification Number which is
generated within the comparable database, could be used with auditors to identify records of
services to distinct individuals, subject to the following:
• HUD and the Comptroller General of the United States, any of their representatives, have
the right of access to any pertinent books, documents, papers, or other records of the
PJ, state recipients, and subrecipients, in order to make audits, examinations, excerpts,
and transcripts. If a provider of services or operator of an NCS is subject to state or local
laws or other federal grant programs that require that HUD not be given access to
records detailing PII of victims, then auditors or evaluators may be given access to
representative files without any sharing of individual identifying information.
25 I Page
Documenting Fleeing or Attempting to Flee Status
If an individual or family qualifies because the individual or family is fleeing or attempting to
flee domestic violence, dating violence, sexual assault, stalking, or human trafficking then
acceptable evidence includes an oral or written statement by the qualifying individual or head
of household seeking assistance that they are fleeing that situation. A statement may be
documented by either:
1. A written certification by the individual or head of household; or
2. A written certification by a victim service provider, intake worker, social worker, legal
assistance provider, health-care provider, law enforcement agency, legal assistance
provider, pastoral counselor, or an intake worker in any other organization from whom
the individual or family sought assistance.
The written documentation need only include the minimum amount of information indicating
that the individual or family is fleeing or attempting to flee domestic violence, dating violence,
sexual assault, stalking, or human trafficking and need not include any additional details about
the conditions that prompted the individual or family to seek assistance.
Reporting and Performance Reports
Recipients must submit reports in a format and at such time as prescribed by the CITY. As of
February 2022,the following are known reporting requirements:
1. A project completion report when HOME-ARP rental activities are completed.
2. For HOME-ARP Supportive Services activities, a monthly report on the number of
homeless and not homeless households assisted with supportive services and housing
counseling, including race and ethnicity, household size, and household type.
HUD may issue additional guidance about reporting on HOME-ARP activities at a later date.
26IPage
P. R. #23187
05/10/2023 M. Essex
Page 5 of 3
ATTACHMENT "B"
�P,,E.,0 i
°= U.S. Department of Housing and Urban Development
L*
�= Community Planningand
nd Development
�'DEVE
Special Attention of
Notice: CPD-21-10
CPD Division Directors
Issued: September 13, 2021
All HOME Coordinators
All HOME Participating Jurisdictions
Expires: This NOTICE is effective until it is
amended, superseded, or rescinded
Cross Reference: 24 CFR Part 92
Subject: Requirements for the Use of Funds in the HOM -Rescue Plan Program E American
Table of Contents
I. PURPOSE ..........................................................................................
II. BACKGROUND .............................. 2
UND.....................................
III. ESTABLISHMENT OF HOME-ARP REQUIREMENTS..................................................................... 2
.........................................IV. QUALIFYING POPULATIONS, TARGETING AND PREFERENCES. 2
V. HOME-ARP ALLOCATION PLAN.............. """ 3
VI. ELIGIBLE ACTIVITIE ••• 12
S....................................................................
A. Administration and Planning """"""""••••••••• 18
............................................
B. HOME-ARP Rental Housin g. ........................................•18
.........................................................
C. Tenant-Based Rental Assistance (TBRA)....... " 20
D. Supportive Services ................................................
E. Acquisition and Development of Non-Congregate Shelter.........
F. Nonprofit Operating and Capacity Building Assistance............................. 55
VII. OTHER FEDERAL REQUIREMENTS 67
Q UIREMENTS..................................................................... 68
VIII. PROGRAM ADMINISTRATION .................................................................
IX. PERFORMANCE REVIEWS................... 75
...................................:.....................
X. FINDING OF NO SIGNIFICANT IMPACT................ 95
97
Appendix—Waivers and Alternative Requirements for HOME Investment Part
Program—American Rescue Plan (HOME-ARP) nerships
I, PURPOSE
This Notice establishes requirements for
appropriated under section 3205 of the American
fundssfor theHOME Investment Partnerships
Rescue Plan Act of 2021 (P.L. 117-2)("ARP") services.
Program (HOME)to provide homelessness assistance and supportive
II. BACKGROUND
On March 11, 2021,President Biden signed ARP into law,which pro the economy,public trillion in
relief to address the continued impact of the COVID-19 pandemic
health, State and local governments, individuals, and businesses.
To address the need for homelessness assistance and supportive services, Congress
appropriated$5 billion in ARP funds to be administered through and HOamilihes to who homeless, at
perform four
activities that must primarily benefit qualifying individuals
risk of homelessness, or in other vulnerable populations. These activities tenant-based rental in Jude: (TBRA), (3)
development and support of affordable housing, (2)
provision of supportive services; and(4) acquisition and development of non-congregate
shelter units. The program described in`this notice for the use of the$5 billion in ARP funds is
the HOME-American Rescue Plan or"HOME-ARP."
s
ARP defines qualifying
individuals or families as those that are (1)homeless, a4dU S Cin
section 103(a) of the McKinney-Vento Homeless Assistance Act, as amended
11302(a)) ("McKinney-Vento"); (2) at risk of homelessness,as defined in section 401 of
McKinney-Vento; (3) fleeing, or attempting
to flee domestic violence, dating violence, sexual
assault, stalking, or human trafficking; (4)part art of other populations where providing supportive
ve
services or assistance would prevent a family's homelessness
or
s that i ldlserc a veteran with they
greatest risk of housing instability; or(5)veterans and
il
member that meet the criteria in one of (1)-(4) above.
ARP authorized HUD to allocate HOME-ARP funds met
states,units of general local
government, insular areas, and consortia of units ofgeneral local government that qualified2021,pursuant to section 217 of the
for an allocation.of HOME funds in Fiscal Year(FY)
Cranston-Gonzalez National Affordable Housing Act of 1990, as amended(42 U.S.C. 12701 et
seq.) ("NAHA").
On April 8,2021,HUD allocated HOME-ARP funds to 651 grantees using
the HOME formula established at 24 CFR 92.50 and 92.60. The HOME-ARP allocation
amounts can be found here.
III. ESTABLISHMENT OF HOME-ARP REQUIREMENTS
ortive services assistance under the HOME
ARP provides funds for homelessness and supp and authorizes the Secretary of HUD to
statute of Title II of NAHA(42 U.S.C. 12721 et seq.)
waive or specify alternative requirements for any provision of NAHA or regulation for the
administration of the HOME-ARP program, except requirements related to fair housing, civil
rights, nondiscrimination, labor standards, and the environment,upon a finding that the waiver
or alternative requirement is necessary to expedite or facilitate the use of HOME-ARP funds.
Pursuant to ARP, the per-unit cost limits (42 U.S.C. 12742(e)), commitment requirements (42
U.S.C. 12748(g)), matching requirements (42 U.S.C. 12750), and set-aside for housing
developed, sponsored, or owned by community housing development organizations(CHDOs)
(42 U.S.C. 12771) in NAHA do not apply to HOME-ARP funds.
This Notice describes the requirements applicable to a participating jurisdiction's (PJ's)use of
HOME-ARP funds. Consolidated plan requirements for HOME are in title I of NAHA and 24
CFR part 91. HOME program regulations are in 24 CFR part 92. Except as described in ARP
and this Notice, HOME statutory and regulatory provisions apply to a PJ's use of HOME-ARP
funds. Sections I-IX of this Notice describe the HOME-ARP requirements imposed on a PJ for
the use of HOME-ARP funds to assist the qualifying populations through HOME-ARP projects
or activities. The Appendix describes the waivers and alternative requirements imposed on PJs
for the use of HOME-ARP funds and is included in any reference to"this Notice." Specific
citations in the Notice shall mean the statute or regulation cited, as may be revised by the
Appendix to this Notice. PJs and insular areas must comply with all applicable statutory,
regulatory, and alternative requirements, as described in this Notice, including the Appendix.
IV. QUALIFYING POPULATIONS, TARGETING AND
PREFERENCES
ARP requires that funds be used to primarily benefit individuals and families in the following
specified"qualifying populations." Any individual or family who meets the criteria for these
populations is eligible to receive assistance or services funded through HOME-ARP without
meeting additional criteria (e.g., additional income criteria). All income calculations to meet
income criteria of a qualifying population or required for income determinations in HOME-
ARP eligible activities must use the annual income definition in 24 CFR 5.609 in accordance
with the requirements of 24 CFR 92 203(a)(1).
A. Qualifying Populations
1. Homeless, as defined in 24 CFR 91.5 Homeless(1), (2), or(3):
(1)An individual or family who lacks a fixed, regular, and adequate nighttime residence,
meaning:
(i)An individual or family with a primary nighttime residence that is a public or private
place not designed for or ordinarily used as a regular sleeping accommodation for
human beings, including a car,park, abandoned building, bus or train station, airport, or
camping ground;
(ii)An individual or family living in a supervised publicly or privately operated shelter
designated to provide temporary living arrangements (including congregate shelters,
transitional housing, and hotels and motels paid for by charitable organizations or by
federal, state, or local government programs for low-income individuals); or
3
(iii) An individual who is exiting institution place not meant forhuman habitation
less and who resided in an emergency sheltero
immediately before entering that institution;
(2) An individual or family who will imminently lose their primary nighttime residence,
provided that:
(i) The primary nighttime residence will be lost within 14 days of the date of application
for homeless assistance;
(ii)No subsequent residence has been identified; and
s, e.g.,
(iii)The individual or family lacks the resources
needed to obtain otherkpermanent housing;
ily,
friends, faith-based or other social networks
(3)Unaccompanied youth under 25 years of age,
,definition,or
amilies with who children and youth,who
do not otherwise qualify as homeless underthis
(i)Are defined as homeless under section 387 of the Runaway and Homeless Youth Act
(42 U.S.C. 5732a), section 637 of the Head Start Act(42 U.S.C.14043e 2)9section 330(h) of the 832), section 41403 f
the Violence Against Women Act of 1994(42 U.S.0 section 3 of the Food and Nutrition Act
Public Health Service Act(42 U.S.C. 254b(h)),
of 2008 (7 U.S.C. 2012), section 17(b) of the Child Nutrition Act of 1966 (42 U.S.C.
1786(b)), or section 725 of the McKinney-Vento Homeless Assistance Act(42 U.S.C.
11434a);
(ii)Have not had a lease, ownership interest, or occupancy agreement in permanent
housing at any time during the 60 days immediately preceding the date of application for
homeless assistance;
(iii)Have experienced persistent instability as measured by two moves or more during
the 60-day period immediately preceding the date of applying for homeless assistance;
and
(iv) Can be expected to continue in such status for an extended period of time because of
chronic disabilities, chronic physical health or mental health conditions, substance
addiction,histories of domestic violence or childhood abuse(including neglect),the
presence of a child or youth with a disability, or two or more barriers to employment,
which include the lack of a high school degree or General Education Development
(GED), illiteracy, low English proficiency, a history of incarceration or detention for
criminal activity, and a history of unstable employment;
2. At risk of Homelessness, as defined in 24 CFR 91.5 At risk of homelessness:
(1) An individual or family who:
4
(i) Has an annual income below 30 percent of median family income for the area, as
determined by HUD;
(ii) Does not have sufficient resources or support networks, e.g., family, friends, faith-
based or other social networks, immediately available to prevent them from moving to
an emergency shelter or another place described in paragraph (1) of the "Homeless"
definition in this section; and
(iii) Meets one of the following conditions:
(A) Has moved because of economic reasons two or more times during the 60 days
immediately preceding the application for homelessness prevention assistance;
(B) Is living in the home of another because of economic hardship;
(C)Has been notified in writing that their right to occupy their current housing or
living situation will be terminated within 21 days after the date of application for
assistance;
(D)Lives in a hotel or motel and the cost of the hotel or motel stay is not paid by
charitable organizations or by federal, State, or local government programs for low-
income individuals;
(E)Lives in a single-room occupancy or efficiency apartment unit in which there
reside more than two persons or lives in a larger housing unit in which there reside
more than 1.5 people per room, as defined by the U.S. Census Bureau;
(F) Is exiting a publicly funded institution, or system of care (such as a health-care
facility, a mental health facility, foster care or other youth facility, or correction
program or institution); or
(G) Otherwise lives in housing that has characteristics associated with instability and
an increased risk of homelessness, as identified in the recipient's approved
consolidated plan;
(2)A child or youth who does not qualify as "homeless"under this section, but qualifies as
"homeless"under section 387(3)of the Runaway and Homeless Youth Act(42 U.S.C.
5732a(3)), section 637(11) of the Head Start Act(42 U.S.C. 9832(11)), section 41403(6) of
the Violence Against Women Act of 1994 (42 U.S.C. 14043e-2(6)), section 330(h)(5)(A)
of the Public Health Service Act(42 U.S.C. 254b(h)(5)(A)), section 3(1) of the Food and
Nutrition Act of 2008 (7 U.S.C. 2012(1)), or section 17(b)(15) of the Child Nutrition Act of
1966(42 U.S.C. 1786(b)(15)); or
(3) A child or youth who does not qualify as "homeless"under this section but qualifies as
"homeless"under section 725(2) of the McKinney-Vento Homeless Assistance Act (42
5
U.S.C. 11434a(2)), and the parent(s) or guardian(s)of that child or youth if living with her
or him.
3. Fleeing,or Attempting to Flee,Domestic Violence,Dating Violence, Sexual Assault,
Stalking,or Human Trafficking, as defined by HUD.
For HOME-ARP, this population includes any individual or family who is fleeing, or is
attempting to flee, domestic violence, dating violence, sexual assault, stalking, or human
trafficking. This population includes cases where an individual or family reasonably
believes that there is a threat of imminent harm from further violence due to dangerous
or life-threatening conditions that relate to violence against the individual or a family
member, including a child, that has either taken place within the individual's or family's
primary nighttime residence or has made the individual or family afraid to return or
remain within the same dwelling unit. In the case of sexual assault, this also includes
cases where an individual reasonably believes there is a threat of imminent harm from
further violence if the individual remains within the same dwelling unit that the
individual is currently occupying,or the sexual assault occurred on the premises during
the 90-day period preceding the date of the request for transfer.
Domestic violence,which is defined in 24 CFR 5.2003 includes felony or misdemeanor
crimes of violence committed by:
.1) A current or former spouse or intimate partner of the victim(the term"spouse
or intimate partner of the victim"includes a person who is or has been in a
social relationship of a romantic or intimate nature with the victim, as
determined by the length of the relationship,the type of the relationship, and
the frequency of interaction between the persons involved in the relationship);
2) A person with whom the victim shares a child in common;
3) A person who is cohabitating with or has cohabitated with the victim as a
spouse or intimate partner;
4) A person similarly situated to a spouse of the victim under the domestic or
family violence laws of the jurisdiction receiving HOME-ARP funds; or
5) Any other person against an adult or youth victim who is protected from that
person's acts under the domestic or family violence laws of the jurisdiction.
Dating violence which is defined in 24 CFR 5.2003 means violence committed by a
person:
1) Who is or has been in a social relationship of a romantic or intimate nature
with the victim; and
2) Where the existence of such a relationship shall be determined based
on a consideration of the following factors:
a. The length of the relationship;
b. The type of relationship; and
c. The frequency of interaction between the persons involved in the
relationship.
6
Sexual assault which is defined in 24 CFR 5.2003 means any nonconsensual
sexual act proscribed by Federal, Tribal, or State law, including when the victim
lacks capacity to consent.
Stalking which is defined in 24 CFR 5.2003 means engaging in a course of conduct
directed at a specific person that would cause a reasonable person to:
1) Fear for the person's individual safety or the safety of others; or
2) Suffer substantial emotional distress.
Human Trafficking includes both sex and labor trafficking, as outlined in the
Trafficking Victims Protection Act of 2000 (TVPA), as amended (22 U.S.C. 7102).
These are defined as:
1) Sex trafficking means the recruitment, harboring, transportation, provision,
obtaining, patronizing, or soliciting of a person for the purpose of a commercial
sex act, in which the commercial sex act is induced by force, fraud, or coercion,
or in which the person induced to perform such act has not attained 18 years of
age; or
2) Labor trafficking means the recruitment, harboring, transportation,provision, or
obtaining of a person for labor or services, through the use of force, fraud, or
coercion for the purpose of subjection to involuntary servitude, peonage, debt
bondage, or slavery.
4. Other Populations where providing supportive services or assistance under section
212(a)of NAHA (42 U.S.C. 12742(a)) would prevent the family's homelessness or
would serve those with the greatest risk of housing instability. HUD defines these
populations as individuals and households who do not qualify under any of the
populations above but meet one of the following criteria:
(1) Other Families Requiring Services or Housing Assistance to Prevent
Homelessness is defined as households (i.e., individuals and families)who have
previously been qualified as "homeless"as defined in 24 CFR 91.5, are currently
housed due to temporary or emergency assistance, including financial assistance,
services,temporary rental assistance or some type of other assistance to allow the
household to be housed, and who need additional housing assistance or supportive
services to avoid a return to homelessness.
(2) At Greatest Risk of Housing Instability is defined as household who meets either
paragraph (i) or(ii)below:
(i) has annual income that is less than or equal to 30% of the area median income, as
determined by HUD and is experiencing severe cost burden(i.e., is paying more than
50% of monthly household income toward housing costs);
7
(ii) has annual income that is less than or equal to 50% of the area median income, as
determined by HUD, AND meets one of the following conditions from paragraph (iii)
of the"At risk of homelessness"definition established at 24 CFR 91.5:
(A)Has moved because of economic reasons two or more times during the 60 days
immediately preceding the application for homelessness prevention assistance;
(B)Is living in the home of another because of economic hardship;
(C)Has been notified in writing that their right to occupy their current housing or
living situation will be terminated within 21 days after the date of application for
assistance;
(D)Lives in a hotel or motel and the cost of the hotel or motel stay is not paid by
charitable organizations or by Federal, State, or local government programs for
low-income individuals;
(E)Lives in a single-room occupancy or efficiency apartment unit in which there
reside more than two persons or lives in a larger housing unit in which there reside
more than 1.5 persons reside per room, as defined by the U.S. Census Bureau;
(F) Is exiting a publicly funded institution, or system of care(such as a health-care
facility, a mental health facility, foster care or other youth facility, or correction
program or institution); or
(G)Otherwise lives in housing that has characteristics associated with instability and
an increased risk of homelessness, as identified in the recipient's approved
consolidated plan
Veterans and Families that include a Veteran Family Member that meet the criteria for one
of the qualifying populations described above are eligible to receive HOME-ARP assistance.
B. Use of Funds to Benefit Qualifying Populations
ARP states that funds must be used to primarily benefit the qualifying populations through the
four eligible activities: (1) TBRA, (2)development and support of affordable housing, (3)
provision of supportive services;and-(4)acquisition and development-of non:congregate shelter
(NCS)units. Recognizing the urgent needs of individuals and families in qualifying
populations,HUD is requiring that:
• 100% of HOME-ARP funds used by a PJ for TBRA, supportive services, and
acquisition and development of non-congregate shelter units must benefit individuals
and families in qualifying populations. Individuals and families in qualifying
populations may be assisted by one or more of the HOME-ARP eligible activities,
consistent with the requirements in this Notice.
• Not less than 70 percent of affordable rental housing units acquired, rehabilitated, or
constructed with HOME-ARP funds by a PJ must be occupied by households in the
qualifying populations. Units that are not restricted to occupancy by qualifying
populations are subject to income targeting and rent requirements established under the
8
HOME-ARP Rental Program rules and are only permitted in projects with rental units
restricted for occupancy by qualifying populations.
HUD recognizes that, because many households in the qualifying populations are unable to pay
rents sufficient to cover unit operating costs, PJs and project owners should attempt to obtain
Federal or state project-based rental subsidies, if available. Since project-based rental subsidies
can be difficult to secure, additional flexibility may be necessary to structure and underwrite
projects so that they remain both affordable and financially viable. HUD is providing PJs with
additional flexibilities in Section VI.B. to structure and underwrite HOME-ARP rental projects
so they remain financially viable during the minimum compliance period. One of these
flexibilities is permitting up to 30 percent of HOME-ARP rental housing units funded by a PJ to
be occupied by low-income households. PJs are encouraged to use this flexibility only when it
is required to facilitate development of a HOME-ARP rental project.
PJs must determine and document that households meet the definition of a qualifying
population or, for the portion of HOME-ARP rental units not restricted to these populations,
that households are low-income.
C. Preferences Among Qualifying Populations, Referral Methods, and
Subpopulations
1. Preferences
ARP establishes the qualifying populations that are eligible for assistance with HOME-ARP
funds. A PJ may establish reasonable preferences among the qualifying populations to
prioritize applicants for HOME-ARP projects or activities based on the PJ's needs and
priorities, as described in its HOME-ARP allocation plan. For example, a PJ may set a
preference among qualifying individuals and families for a HOME-ARP non-congregate shelter
for individuals and families who are homeless; fleeing or attempting to flee domestic violence,
dating violence, sexual assault, stalking, or human trafficking; and veterans and families with a
veteran family member that meet the criteria of one of these prior qualifying populations,
consistent with its HOME-ARP allocation plan.
The PJ must comply with all applicable fair housing, civil rights, and nondiscrimination
requirements, including but not limited to those requirements listed in 24 CFR 5.105(a) when
applying preferences through its referral methods. Persons who are eligible for a preference
must have the opportunity to participate in all HOME-ARP activities of the PJ in which they are
eligible under this Notice, including activities that are not separate or different, and cannot be
excluded because of any protected characteristics or preferential status.
Targeted assistance: If HOME-ARP funds are used for TBRA, the PJ may establish a
preference for individuals with special needs or persons with disabilities among the HOME-
ARP qualifying populations. Within the qualifying populations, participation may be limited to
persons with a specific disability only, if necessary,to provide effective housing, aid, benefit, or
services that would be as effective as those provided to others in accordance with 24 CFR
8.4(b)(1)(iv). The PJ may also provide a preference for a specific category of individuals with
disabilities (e.g., persons with HIV/AIDS or chronic mental illness) within the qualifying
9
populations only if the specific category is identified in the PJ's HOME-ARP allocation plan as
having unmet need and the preference is needed to narrow the gap in benefits and services
received by such persons.
2. Referral Methods for Proiects or Activities
A PJ may use the referral methods described below to administer HOME-ARP assistance to
qualifying individuals and families. Regardless of the referral method used by the PJ, HUD
holds the PJ responsible for determining and documenting that beneficiaries meet the definition
of a qualifying population or, for the portion of HOME-ARP rental units not restricted to
qualifying populations,that beneficiaries are low-income.
A PJ may use the coordinated entry or coordinated entry process (CE) of a continuum of care
(CoC) for referrals for projects and activities as described below. Under 24 CFR 578.3, a CE is
a centralized or coordinated process designed to coordinate program participant intake
assessment and provision of referrals within a defined area. HUD requires each CoC to establish
and operate a CE with the goal of increasing the efficiency of local crisis response systems and
improving fairness and ease of access to resources,including mainstream resources. A PJ may
permit a CoC CE to collect information and documentation required to determine whether an
individual or family meets the criteria of a HOME-ARP qualifying population at any point in
the coordinated entry process, (i.e., after or concurrently with the assessment and intake
processes) as long as that information is not used to rank a person for HOME-ARP assistance
other than as specified by the preferences or method of prioritization established by the PJ, in
accordance with HOME-ARP requirements. If the PJ uses CE,the PJ cannot require HOME-
ARP victim service providers to use the CE but may permit them to do so.
The PJ must comply with all applicable nondiscrimination and equal opportunity laws and
requirements listed in 24 CFR 5.105(a) and any other applicable fair housing and civil rights
laws and requirements when using the following referral methods:
i. Use of Expanded CE in HOME-ARP
Under this referral method, a PJ may use a CE established by a CoC operating within its
boundaries for one or more projects or activities if the CE accepts all HOME-ARP
qualifying populations eligible for those activities or projects, in accordance with the
preferences and prioritization; if any,established or approvedby the-P-J in its HOME-ARP
allocation plan and imposed through the PJ's written agreements.
Before using a CoC's CE, PJs should consider whether the CE covers the same service area
as the HOME-ARP project or activity that would use that CE. At a minimum, the PJ must
establish policies and procedures that describe the relationship of the geographic area(s)
served by the project or activity to the geographic area(s) covered by the CoC CE and
address how the CE will provide access and implement uniform referral processes in
situations where a project's geographic area(s) is broader than the geographic area(s)
covered by the CE.
10
The PJ must require a project or activity to_use CE along with other referral methods (as
provided in section ii below) or to use only a project/activity waiting list (as provided in
section iii below) if:
1. the CE does not have a sufficient number of qualifying individuals and families to
refer to the PJ for the project or activity;
2. the CE does not include all HOME-ARP
qualifying
3. the CE fails to provide access and implement uniform referral processes in situ
where a project's geographic area(s) is broader than the geographic area(s) covered ations
by the CE.
ii. Use of CE with Other Referral Methods
The PJ may use a CoC CE with additional referrals from outside organizations or project-
specific waiting lists consistent with HOME-ARP requirements. If using this referral
method, the PJ must establish or approve any preferences or prioritization criteria applied by
a CoC CE or other referral sources. The PJ may also use a waiting list to receive referrals
from a CoC CE and other referral agencies for a project or activity, where a CoC CE or
referral agency refers an applicant that is placed on the waiting list for that project or
activity in chronological order.
If applicable, a PJ must establish policies and procedures for applying a PJ's established
preferences and method of prioritization, if any, when accepting direct referrals from a
°C
CE and other referral agencies and must document that such the policies and procedures
were followed for each applicant served.
iii. Use of a Project/Activity Waiting List
The PJ may establish a waiting list for each HOME-ARP project or activity. All qualifying
individuals or families must have access to apply for placement on the waiting list for an
activity or project. Qualifying individuals or families on a waiting list must be accepted in
accordance with the PJ's preferences, if any, consistent with this Notice or, if the PJ did not
establish preferences, in chronological order, insofar as practicable.
3. Limiting Eligibility to Subpopulations
PJs must follow all applicable fair housing, civil rights, and nondiscrimination requirements,
including but not limited to those requirements listed in 24 CFR 5 105(a). This includes, but is
not limited to, the Fair Housing Act, Title VI of the Civil Rights Act, section 504 of
Rehabilitation Act, HUD's Equal Access Rule, and the Americans with Disabilities Act, as
applicable.
HOME-ARP rental housing or NCS may be limited to a specific subpopulation of a qualifying
population identified in Section N.A. of this Notice, so long as admission does not discriminate
against any protected class under federal nondiscrimination laws in 24 CFR 5.105 (e.g., the
housing may be limited to homeless households and at risk of homelessness households,
11
veterans and their families,victims of domestic violence,dating violence, sexual assault,
stalking or human trafficking and their families).
Recipients may limit admission to or provide a preference for services are rental housing or
NCS to households who need the specialized supportive
domestic violence services). However,no otherwW�eoe lble individuals with servicaeslprovided
or
families including an individual with a disability may benefit from the
may be excluded on the grounds that they do not have a particular disability.
Consistent with the statutory authority under ARP,HOME-AA under NCS the ESG may be conveprogrrted
to all
permanent housing under the CoC program or used
program and fair housing and nondiscrimination requirements are and.et or Asa such,
sk of HOME-ARP
NCS may need to limit eligibility to households that are homeless
homelessness if the shelter will be converted to permanent housing under the CoC program or
used as an emergency shelter in the ESG program.
V. HOME-ARP ALLOCATION PLAN
PJs develop annual action plans as part of their application for lHOME di prTo receivean its
HOME-ARP funds, a PJ must engage in consultation andpublic participation
develop a HOME-ARP allocation plan that meets the requirements F Fiscal shed in his annual section
of
the Notice and submit it to HUD as a substantial amendment2021providedbyARP to
action plan. HUD is using the waiver and alternative
plan inthistNot authoritye. The HOME-ARP
establish requirements for the HOME
allocation plan must describe how the PJ intends to distribute HOME-ARP funds, including
ncludn PJ's
how it will use these funds to addressneeds of HOME-ARP qualifying populations.
HOME-ARP allocation plan must include:
• A summary of the consultation process and results of upfront consultation;
• A summary of comments received through the public participation process and a
summary of any comments or recommendations not accepted and the reasons why;
• A description of HOME-ARP qualifying populations within the jurisdiction;
• An assessment of unmet needs of each qualifying population;
i and shelter inventory,homeless assistance and
• An assessment of gaps _
services, and homelessness prevention service delivery system;
• A summary of the planned use of HOME-ARP funds for eligible activities based on the
unmet needs of the qualifying populations; -
• An estimate of the number of housing units for qualifying populations the PJ will
produce or preserve with its HOME-ARP allocation; and
• A description of any preferences for individuals and families in a particular qualifying
population or a segment of a qualifying population.
All the above required elements of the HOME-ARP allocation plan shall be part of the FY 2021
annual action plan for purpo
ses of the HOME-ARP program. Consequently,PJs are not
required to amend their consolidated plans.
12
A. Consultation
Before developing its HOME-ARP allocation plan, a PJ must consult with agencies and service
providers whose clientele include the HOME-ARP qualifying populations to identify unmet
needs and gaps in housing or service delivery systems. In addition, a PJ should use consultation
to determine the HOME-ARP eligible activities currently taking place within its jurisdiction and
potential collaborations for administering HOME-ARP. This consultation will provide a basis
for the PJ's strategy for distributing HOME-ARP funds for eligible activities to best meet the
needs of qualifying populations. At a minimum, a PJ must consult with the CoC(s) serving the
jurisdiction's geographic area,homeless and domestic violence service providers, veterans'
groups,public housing agencies (PHAs),public agencies that address the needs of the
qualifying populations, and public or private organizations that address fair housing, civil rights,
and the needs of persons with disabilities. State PJs are not required to consult with every PHA
or CoC within the state's boundaries; however, local PJs must consult with all PHAs(including
statewide or regional PHAs) and CoCs serving the jurisdiction. In its plan, a PJ must describe
its consultation process, list the organizations consulted, and summarize the feedback received
from these entities.
B. Public Participation
PJs must provide for and encourage citizen participation in the development of the HOME-ARP
allocation plan. Before submitting the HOME-ARP allocation plan to HUD, PJs must provide
residents with reasonable notice and an opportunity to comment on the proposed HOME-ARP
allocation plan of no less than 15 calendar days. The PJ must follow its adopted requirements
for"reasonable notice and an opportunity to comment"for plan amendments in its current
citizen participation plan. In addition, PJs must hold at least one public hearing during the
development of the HOME-ARP allocation plan prior to submitting the plan to HUD.
For the purposes of HOME-ARP, PJs are required to make the following information available
to the public:
• The amount of HOME-ARP funds the PJ will receive.
• The range of activities the PJ may undertake.
A PJ must consider any comments or views of residents received in writing, or orally at a public
hearing, when preparing the HOME-ARP allocation plan. In its plan, a PJ must describe its
public participation process, including any efforts made to broaden public participation. In its
plan, the PJ must also include a summary of comments and recommendations received through
the public participation process and any comments or recommendations not accepted and the
reasons why.
Throughout the HOME-ARP allocation plan public participation process, the PJ must follow its
applicable fair housing and civil rights requirements and procedures for effective
communication, accessibility and reasonable accommodation for persons with disabilities and
providing meaningful access to participation by limited English proficient(LEP) residents that
are in its current citizen participation plan as required by 24 CFR 91.105 and 91.115.
13
C. HOME-ARP Allocation Plan Requirements
The HOME-ARP allocation plan must describe the distribution of HOME-ARP funds and the
process for soliciting applications and/or selecting eligible projects. The plan must also identify
any preferences being established for eligible activities or projects. However,PJs are not
required to identify specific projects that will be funded in the HOME-ARP allocation plan.
1. Needs Assessment and Gaps Analysis: A PJ must evaluate the size and demographic
composition of qualifying populations within its boundaries and assess the unmet needs of
those populations. In addition, a PJ must identify any gaps within its current shelter and
housing inventory as well as the service delivery system. A PJ should use current data,
including point in time count, housing inventory count, or other data available through
CoCs, and consultations with service providers to quantify the individuals and families in
the qualifying populations and their need for additional housing, shelter, or services. A PJ
should identify and consider the current resources available to assist qualifying populations,
including congregate and non-congregate shelter units, supportive services, TBRA, and
affordable and permanent supportive rental housing. A PJ must consider the housing and
service needs of qualifying populations, including but not limited to:
• Sheltered and unsheltered homeless populations;
• Those currently housed populations at risk of homelessness;
• Other families requiring services or housing assistance to prevent homelessness; and
• Those at greatest risk of housing instability or in unstable housing situations.
A PJ should include data in its HOME-ARP allocation plan that describes the qualifying
populations.
In addition, a PJ must include a narrative description that:
• Identifies the characteristics of housing associated with instability and an increased
risk of homelessness if the PJ will include such conditions under HUD's definition
of"other populations" as established in Section IV.A.4.2.ii.G. of this Notice.
• Identifies the PJ's priority needs for qualifying populations; and,
• Explains how the PJ determined the level of need and gaps in its shelter and housing
inventory and service delivery systems.
2. HOME-ARP Activities: The HOME-ARP allocation plan must describe how a PJ will
distribute HOME-ARP funds in accordance with its priority needs. The plan must describe
the PJ's method for soliciting applications for funding and/or selecting developers, service
providers, subrecipients and/or contractors and whether the PJ will administer eligible
activities directly. If the PJ will provide any portion of its HOME-ARP administrative
funds to a subrecipient or contractor prior to HUD's acceptance of the PJ's HOME-ARP
allocation plan because the subrecipient or contractor is responsible for the administration of
the PJ's entire HOME-ARP grant,the plan must identify the subrecipient or contractor and
describe its role and responsibilities in administering all of the PJ's HOME-ARP program.
PJs must indicate in the HOME-ARP allocation plan the amount of HOME-ARP funding
that is planned for each eligible HOME-ARP activity type, including administrative and
14
planning activities. In addition, a PJ must demonstrate that any planned funding for
nonprofit organization operating assistance, as described in Section VI.F,nonprofit capacity
building, and administrative costs is within HOME-ARP limits. PJs must also include a
narrative description about how the characteristics of its shelter and housing inventory,
service delivery system, and the needs identified in the PJ's gap analysis provided a
rationale for its plan to fund eligible activities.
3. HOME-ARP Production Housing Goals: The HOME-ARP allocation plan must estimate
the number of affordable rental housing units for qualifying populations that a PJ will
produce or support with its HOME-ARP allocation. The plan must also include a narrative
about the specific affordable rental housing production goal that the PJ hopes to achieve and
describe how it will address the PJ's priority needs.
4. Preferences: The HOME-ARP allocation plan must identify whether the PJ intends to give
preference to one or more qualifying populations or a subpopulation within one or more
qualifying populations for any eligible activity or project. For example, PJs may include a
preference for:
• homeless individuals and families as defined in the ESG and CoC programs;
• individuals with special needs or persons with disabilities among qualifying
individuals and families;
• a specific category of qualifying individuals and families (e.g., chronically homeless
as defined in 24 CFR 91.5).
PJs are not required to describe specific projects to which the preferences will apply in the
HOME-ARP allocation plan. However, a PJ must explain how the use of a preference or
method of prioritization will address the unmet need or gap in benefits and services received
by individuals and families in the qualifying population or category of qualifying
population, consistent with the PJ's needs assessment and gap analysis. The PJ must also
describe how it will still address the unmet needs or gaps in benefits and services of the
other qualifying populations that are not included in a preference through the use of HOME-
ARP funds.
Preferences cannot violate any applicable fair housing, civil rights, and nondiscrimination
requirements, including but not limited to those requirements listed in 24 CFR 5.105(a).
The PJ must comply with all applicable nondiscrimination and equal opportunity laws and
requirements listed in 24 CFR 5.105(a) and any other applicable fair housing and civil rights
laws and requirements when establishing preferences or methods of prioritization.
5. HOME-ARP Refinancing Guidelines: If a PJ intends to use HOME-ARP funds to
refinance existing debt secured by multifamily rental housing that is being rehabilitated with
HOME-ARP funds, it must state its refinancing guidelines in accordance with 24 CFR
92.206(b)(2). The guidelines must describe the conditions under with the PJ will refinance
existing debt for a HOME-ARP rental project. At a minimum, the guidelines must:
• Establish a minimum level of rehabilitation per unit or a required ratio between
rehabilitation and refinancing to demonstrate that rehabilitation of HOME-ARP
rental housing is the primary eligible activity.
15
• Require a review of management practices to demonstrate that disinvestment in the
property has not occurred; that the long-term needs of the project can be met; and
that the feasibility of serving qualified populations for the minimum compliance
period can be demonstrated.
• State whether the new investment is being made to maintain current affordable units,
create additional affordable units, or both.
• Specify whether the required compliance period is the minimum 15 years or longer.
• State that HOME-ARP funds cannot be used to refinance multifamily loans made or
insured by any federal program, including CDBG.
6. Substantial Amendments to the HOME-ARP Allocation Plan: PJs must make a
substantial amendment to the HOME-ARP allocation plan for changes in the method of
distributing funds; to carry out an activity not previously described in the plan; or,to change
the purpose, scope, location,or beneficiaries of an activity, including new preferences not
previously described in the plan. In addition, the requirements for substantial amendments
at 24 CFR 92.63 apply to the HOME-ARP allocation plan for insular areas. PJs are not
required to make a substantial amendment to describe individual projects selected for
funding if the eligible activity is included in the PJ's plan. PJs must make the proposed
substantial amendment public and provide for a 15-day public comment period prior to
submission. Upon completion of the public comment period, PJs must submit substantial
amendments to HUD in accordance with the process for submitting the HOME-ARP
allocation plan as described in Section V.D.
7. Certifications and SF-424: PJs must submit the required certifications in accordance with
the requirements in this Notice,including the following:
a. Affirmatively Further Fair Housing;
b. Uniform Relocation Assistance and Real Property Acquisition Policies Act and Anti-
displacement and Relocation Assistance Plan;
c. Anti-Lobbying;
d. Authority of Jurisdiction;
e. Section 3; and,
f. HOME-ARP specific certification that a PJ will only use HOME-ARP funds consistent
with-ARP-and the HOME-ARP Notice_for eligible activities and eligible costs.
PJs must also submit the SF-424, SF-424B, and SF-424D with the HOME-ARP allocation
plan.
D. Submission and Review Process
1. HOME-ARP Submission and the eCon Planning Suite: Upon completion of the HOME-
ARP allocation plan,a PJ must submit the HOME-ARP allocation plan to HUD. To submit
the HOME-ARP allocation plan,PJs must follow the process in IDIS to make an
amendment to the Fiscal Year(FY)2021 annual action plan. Once the FY 2021 annual
action plan is reopened, a PJ must upload a Microsoft Word or PDF version of the plan as
an attachment next to the"HOME-ARP allocation plan" option on the AD-26 screen(for
16
1
PJs whose FY. 2021 annual action plan is a Year 2-5 annual action plan) or the AD-25
screen(for PJs whose FY 2021 annual action plan is a Year 1 annual action plan that is part
of the 2021 consolidated plan), unless instructed by HUD to follow a different submission
procedure. PJs are not required to make any other edits to the FY 2021
annual on plan
or applicable consolidated plan screens in the eCon Planning Suite. For more informationon how to upload an attachment in the eCon Planning Suite, PJs can refer to the eCon
Planning Suite Desk Guide.
2. HUD Review of the HOME-ARP Allocation Plan: The PJ must submit its HOME-ARP
allocation plan to HUD for review in accordance with 24 CFR 91.500, as revised by this
Notice. Unless instructed otherwise by HUD, the HOME-ARP allocation plan is received
by HUD when the SF-424 is submitted electronically, which means that it is uploaded in the
eCon Planning Suite as an attachment on AD-25 or AD-26 screen, as applicable, and the
action plan status is changed to"Submitted for Review." HUD will review a PJ's HOME-
ARP allocation plan to determine that it is:
• Substantially complete, and
• Consistent with the purposes of ARP.
HUD may disapprove a PJ's HOME-ARP allocation plan in accordance with 24 CFR
91.500(b). HUD may also disapprove a HOME-ARP allocation plan or a portion of a plan
if HUD determines that the plan is inconsistent with the purposes of ARP or substantially
incomplete. A PJ's plan is inconsistent with ARP if it allocates HOME-ARP funds for uses
other than a HOME-ARP eligible activity, as described in this Notice. A PJ's HOME-ARP
allocation plan is substantially incomplete if:
• The PJ does not complete the required public participation or consultation or fails to
describe those efforts in the plan;
• The PJ fails to include the required elements outlined in this Notice, including the
amount of HOME-ARP funds for each eligible HOME-ARP activity type;
• The PJ fails to identify and describe the responsibilities of the subrecipient or
contractor administering all of its HOME-ARP award, if applicable; or,
• HUD rejects the PJ's HOME-ARP certification as inaccurate.
In accordance with section 105(c) of NAHA(42 U.S.C. I2705(c))and 24 CFR 91.500(a), if
the PJ's HOME-ARP allocation plan is not disapproved within 45 days, then the plan is
deemed approved 45 days after HUD receives the plan, and HUD shall notify the PJ that the
plan is accepted.
If HUD determines that the plan is substantially incomplete or that the plan is inconsistent
with ARP, HUD will notify the PJ in writing with the reasons for disapproval, in accordance
with 24 CFR 91.500(c). If a PJ's plan is disapproved,the PJ may revise or resubmit the
plan for HUD review within 45 days after the first notification of disapproval. HUD will
respond to accept or disapprove the resubmitted plan within 30 days of receiving the
revisions or resubmission.
Once HUD notifies a PJ that the plan is accepted,the PJ must make the final HOME-ARP
allocation plan available to the public in accordance with the same requirements in the PJ's
17
current citizen participation plan that are followed to make the PJ's adopted consolidated
plan and substantial amendments available to the public, including the availability of
materials in a form accessible to persons with disabilities, and translated materials in
different languages to accommodate LEP persons,upon request.
3. HUD Review of the HOME-ARP Allocation Plan for Insular Areas: In addition to the
standards for review described in Section V.D.2, HUD If l reviewinsular ake a area's HOME-
ARP allocation plan in accordance with 24 CFR 92.6
2.determination based on the information submitted that the HOME-ARP allocation plan
complies with HOME-ARP allocation plan requirements, or if the eligible activities
described in the plan are not within the insular area's management capability as
demonstrated by past performance in housing and community development programs,HUD
will notify the insular area within 30 days of receipt of the HOME-ARP allocation plan that
supporting documentation is needed. The insular area will have a mutually agreed upon
period to submit the necessary supporting information or to revise the eligible activities in
its HOME-ARP allocation plan.
VI. ELIGIBLE ACTIVITIES
A. Administration and Planning
The PJ may expend, for payment of reasonable administrative and planning costs,up to 15
percent of its HOME-ARP allocation. Reasonable administrative and planning costs for the
HOME-ARP program include:
1. Reasonable costs of overall HOMEos�s include,but are not limited tol necessary program management, coordnation,monitoring,
and evaluation. Such HOME-ARP costs
expenditures for the following:
a. Salaries,wages, and related costs of the PJ's staff If a PJ charges costs to this category,
the PJ may either include the entire salary and related costs allocable to the HOME-ARP
program of each person whose primary responsibilities with regard to the HOME-ARP
program involves program administration assignments, or the prorated share of the
salary, wages,and-related costs of each person whose job includes any program
administrative assignments. A PJ may only use one of these two methods. Program
administration includes: ro
i. Developing systems and schedules for complying with HOME-ARP program
requirements, including systems to prevent a duplication of benefits among
beneficiaries of HOME-ARP activities;
ii. Developing interagency agreements and agreements with entities receiving
HOME-ARP funds;
iii. Monitoring HOME-ARP activities for progress and compliance with HOME-
ARP program requirements;
iv. Preparing HOME-ARP reports and other documents related to the HOME-ARP
program for submission to HUD;
18
v. Coo
rdinating the resolution of audit and monitoring findings on HOME-ARP
activities;
vi. Evaluating HOME-ARP program results against stated objectives in the HOME-
ARP allocation plan, and
vii. Managing or supervising persons whose primary responsibilities with regard to
the HOME-ARP program include such assignments as those described above.
b. Travel costs incurred for official business in carrying out the HOME-ARP program.
c. Administrative services performed under third party contracts or agreements, including
such services as general legal services, accounting services, and audit services.
d. Other costs for goods and services required for administering the HOME-ARP program,
such as: rental or purchase of equipment, insurance, information systems necessary to
track and implement beneficiaries of HOME-ARP activities in accordance with the
requirements of this Notice, utilities, office supplies, and rental and maintenance(but
not purchase) of office space.
e. Costs of administering HOME-ARP TBRA and HOME-ARP supportive services
programs.
2. Staff and overhead costs of the PJ directly related to carrying out a HOME-ARP project, in
accordance with 24 CFR 92.207(b).
3. The provision of information and other resources to residents and citizen organizations
participating in the planning, implementation, or assessment of projects being assisted with
HOME-ARP funds.
4. Activities to affirmatively further fair housing (AFFH) in accordance with 24 CFR 5.151
and the PJ's certification as required under this Notice and 24 CFR 5.152. The AFFH
definition in HUD's Interim Final Rule entitled, "Restoring Affirmatively Furthering Fair
Housing Definitions and Certifications" (86 FR 30779, June 10, 2021), as amended, at 24
CFR 5.151, and the AFFH certification requirement, at 24 CFR 5.152, available at
https://www.federalregister.gov/documents/2021/06/10/2021-12114/restoring-affirmatively-
furthering-fair-housing-definitions-and-certifications.
5. Indirect costs may be charged to the HOME-ARP program under a cost allocation plan
prepared in accordance with 2 CFR part 200, subpart E, as amended.
6. Preparation of the HOME-ARP allocation plan as required in this Notice. Preparation
includes the costs of public hearing, consultations, and publications.
7. Costs of complying with the applicable Federal requirements in 24 CFR part 92, subpart H.
Project-specific environmental review costs may be charged as administrative or project
costs in accordance with 24 CFR 92.206(d)(8) and is at the discretion of the PJ.
19
Funds available under the HOME-ARP appropriation for administration and planning may not
be used to pay costs attributable to the regular HOME Program.
PJs may provide all or a portion of its HOME-ARP administrative funds to subrecipients and
contractors that are administering activities on behalf of the PJ (e.g., CoC entity, other non-
Federal entity), in accordance with the requirements in this Notice. However, from the
obligation date of the HOME-ARP funds in the HOME-ARP Grant Agreement and prior to
HUD's acceptance of the PJ's HOME-ARP allocation plan, a subrecipient or contractor to the
PJ may only incur and expend HOME-ARP funds for eligible administrative and planning costs
if the subrecipient or contractor is responsible for the use of the PJ's entire HOME-ARP award
and has executed a HOME-ARP written agreement that complies with 24 CFR 92.504 and this
Notice. The PJ must also identify the subrecipient or contractor administering the PJ's entire
HOME-ARP award and describe the subrecipient or contractor's responsibilities in the PJ's
HOME-ARP allocation plan.
All costs must comply with the Cost Principles contained in subpart E of the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2
CFR part 200, as amended(Uniform Administrative Requirements).
Once HUD obligates the HOME-ARP funds, as described in Section VIII.C.2 of this Notice,the
PJ may incur and expend up to 5 percent of its HOME-ARP allocation on eligible
administrative and planning costs, as described in this section and 24 CFR 92.207. Before
HUD's acceptance of the PJ's HOME-ARP allocation plan,the PJ is only permitted to incur and
expend HOME-ARP funds on eligible administrative and planning costs.
If the PJ does not submit a HOME-ARP allocation plan or if the PJ's plan is not accepted within
a reasonable period of time, as determined by HUD, all HOME-ARP administrative and
planning costs incurred by the PJ will be ineligible costs and any HOME-ARP funds expended
by the PJ must be repaid to the PJ's HOME Investment Trust Fund Treasury account, in
accordance with guidance issued by HUD. Moreover,if the PJ's HOME-ARP allocation plan
does not identify or include a description of the responsibilities of the subrecipient or contractor
that is responsible for the PJ's entire HOME-ARP award, if applicable,the administrative and
planning costs incurred or expended by the subrecipient or contractor will also be ineligible and
any HOME-ARP funds expended by the PJ's subrecipient or contractor must be repaid to the
PJ's HOME Investment Trust Fund Treasury account,m aeco ance with-guidance from- -- - .
B. HOME-ARP Rental Housing
HOME-ARP funds may be used to acquire, rehabilitate, or construct affordable rental housing
primarily for occupancy by households of individuals and families that meet the definition of
one or more of the qualifying populations described in Section IV.A of this Notice ("qualifying
households"). Unlike the regular HOME Program,which targets HOME-assisted rental units
based on tenant income, 70 percent of all HOME-ARP units will admit households based only
upon their status as qualifying households. This complicates the underwriting and operation of
projects that include HOME-ARP units.As a result,the requirements for HOME-ARP rental
housing provide significant flexibilities to enable HOME-ARP rental projects to remain
20
financially viable and affordable for the
qualifying populations throughout
the minimum
compliance period.
Eligible HOME-ARP rental housing includes "housing"as defined at 24
CFR
92.2
but not limited to manufactured housing, single room occupancy(SRO) , including
supportive housing. Emergency shelters,hotels, and motels (including those currently
as non-congregate shelter), facilities such as nursing homes, residential
treatment y operating
correctional facilities,halfway houses, and housing for students or dormitories do not ons,
housing in the HOME-ARP program. However, HOME-ARP fundst a cons titute
maybe used t
rehabilitate such structures into HOME-ARP rental housing.
acquire and
ousing.
Developing financially feasible rental housing for qualifying households is challenging in the
absence of project-based rental assistance. Most HOME-assisted rental projects rely on tenant
rents to cover all or a portion of the debt service and project operating costs. Most HOME-ARP
qualifying households will be unable to pay a rent that covers allocated debt service
or
operating costs, requiring PJs to use other techniques to determine that HOME-ARp units are
affordable and that projects containing HOME-ARP units are sustainable throughout the
minimum compliance period. PJs are encouraged to work with local PHAs and other state or
local agencies to obtain project-based rental assistance for units funded with HOME-ARP.
the absence of such project-based rental assistance, the HOME-ARP units for qualifying In
households may require substantial capital investment through HOME-ARP and other Feder
state, local, or private sources to eliminate debt service on the units. ARP suspended the al,
maximum per-unit subsidy limit for HOME-ARP units, enabling HOME-ARP funds to pay the
entire cost to acquire, rehabilitate and/or construct the HOME-ARP rental units, eliminatingth
need for the HOME-ARP units to support debt. In mixed-income developments, revenuer e
market rate or higher income-restricted units may also provide an internal subsidy to covers m
portion of the operating costs of HOME-ARP units.
To address these challenges and maintain affordability, HUD is using its HOME-ARP statutory
authority to:
• Establish alternative rent requirements to 24 CFR 92 252(b) and extend an owner's
ability to charge the maximum rent permissible under a rental assistance program (to
units occupied by recipients of tenant-based rental assistance(e.g., Housing Choice
Vouchers, HOME TBRA, HOME-ARP TBRA).
• Establish a minimum compliance period of 15 years for all HOME-ARP rental units
irrespective of the amount of subsidy per unit or whether the units are acquired,
rehabilitated, and/or newly constructed.
• Permit the use of HOME-ARP funds to provide ongoing operating cost assistance or
capitalize a project operating cost assistance reserve to address operating deficits of the
HOME-ARP units restricted for qualifying households during the compliance period.
• Allow not more than 30 percent of the total number of rental units assisted with HOME-
ARP funds by the PJ to be restricted to households that are low-income as defined in 24
CFR 92.2 ("low-income households"). These units may only be located in projects
containing HOME-ARP units restricted for qualifying households. The HOME-ARP
rental units occupied by low-income households must operate under the regulations
applicable to HOME rental units at 24 CFR 92.252 (i.e., be occupied by low-income
21
households and bearing a rent not greater than the lesserestablished by HUD, orb a rentr
existing housing for comparable units in the area, as percent
equal to 30 percent of the adjusted income of a family with aualincome
atr 65 number
of median income for the area, as determined by HUD,
adjustments
of bedrooms in the unit).
P
activities to
1. Tar etin and Occu arc Re uirements: ARP requires TOo imp ME-R the feasibility and
primarily benefit households in the qualifying populations.
maintain the long-term viability of projects with HOME-ARP s are not ental units
tri for for qualifying
f yinpancy
households, a PJ may invest HOME-ARP funds in
solely for qualifying populations as described in this section. Specifically,participating
jurisdictions must comply with the following requirements:
a. Tar etin : HOME-ARP funds can onl be invested in units restricted for uali in
households or low-income households as follow
i. Not less than 70 percent of the total number of rental
units
by households with th HOME-
ARP funds by the PJ must be restricted for occupancy Y
are
qualifying households at the time of the household's initial occupancy; and,
ii. Not more than 30 percent of the total number of rental units assisted with HOME-
ARP funds by the PJ may be restricted to low-income households.
hds.house eholds,rental
units do not have to be restricted for occupancy by qualifying hour hin projects that
however
rental units restricted to low-income households are only permitted
include HOME-ARP units for qualifying households.
b. Occupdncy Requirements:
'n Households. Units restricted for occupancy by qualifying households
i. Qualifyingon population
must be occupied by households that�meAe�un t fiAtqual�fyi g household after
at the time of admission to the HOME-ARP
retains its eligibility to occupy
a HOME-ARP rental unit restricted for
qualifying populations, irrespective of the qualifying household's changes o unction.
income
or whether the household continues
to meet uhe definition of a qualifying ehold remains in compliance e with the
As such, a unit restricted for a qualifyinga in
HOME-ARP unit restriction as long as the unit
ispopulationoccupied
by a
at q utalime ino admission.
g
household that met the definition of a qualifying g
ome
ii. Low-Income Households. At initial occupancy,units meet the def e ition of lowcin ome
households mustbe occupied by households that
in 24 CFR 92.2. If a tenant's income increases above
nsidered temhe applicable
low-irarily ome
limit during the compliance period,the unit will be co
ut of
compliance. Noncompliance requires the PJ to take action
i 1 c oo dance with the
rent and unit mix requirements in Sections VI.B.15 and
ce,
respectively.
22
2. Eligible Activities: A PJ may use HOME-ARP funds for acquisition, construction, and
rehabilitation, including reconstruction as defined in 24 CFR 92.2, of affordable rental
housing for qualifying and low-income households. Acquisition of vacant land or
demolition must be undertaken only with respect to a particular housing project intended to
provide HOME-ARP rental housing within the timeframes provided in Section VI.B. of this
Notice. A HOME-ARP rental project must meet the definition of project in 24 CFR 92.2.
HOME-ARP funds may be used to assist one or more units in a project. Only the eligible
development costs of the HOME-ARP units may be charged to the HOME-ARP program.
Cost allocation in accordance with 24 CFR 92.205(d)(1) is required if the assisted and non-
assisted units are not comparable. After project completion, the number of HOME-ARP
units in a project cannot be reduced. During the HOME-ARP minimum compliance period
and prior to the end of the HOME-ARP budget period, a PJ may invest additional HOME-
ARP funds to provide operating cost assistance but is prohibited from investing additional
HOME-ARP funds for capital costs except within the 12 months after project completion.
A qualifying household admitted to a HOME-ARP rental unit may still receive HOME-ARP
supportive services or TBRA in accordance with the requirements in this Notice.
3. Forms of Assistance: The PJ may invest HOME-ARP funds in accordance with the
eligible forms of assistance described in 24 CFR 92.205(b). Each PJ has the right to
establish the terms of assistance, subject to the HOME-ARP requirements described in this
Notice.
4. Minimum Amount of Assistance: The minimum amount of HOME-ARP funds that must
be invested in a rental housing project is $1,000 times the number of HOME-ARP-assisted
units in the project as established in 24 CFR 92.205(c).
5. Eligible Costs: HOME-ARP funds may be used to pay for up to 100%of the following
eligible costs associated with the acquisition, development, and operation of HOME-ARP
rental units:
a. Development hard costs—defined in 24 CFR 92.206(a).
b. Refinancing—the cost to refinance existing debt secured by a rental project that is being
rehabilitated with HOME-ARP funds in accordance with 24 CFR 92.206(b)(2) and the
PJ's HOME-ARP refinancing guidelines, as stated in their HOME-ARP Allocation Plan.
c. Acquisition—the costs of acquiring improved or unimproved real property.
d. Related soft costs—defined in 24 CFR 92.206(d).
e. Relocation costs—as defined in 24 CFR 92.206(f), 24 CFR 92.353, and described in this
Notice.
f. Costs relating to payment of loans—If the HOME-ARP funds are not used to directly
pay a cost specified in this HOME-ARP rental housing section,but are used to pay off a
23
construction loan,bridge financing loan, or guaranteed loan,the payment of principal
and interest for such loan is an eligible cost only if: (1)the loan was used for eligible
costs specified in this HOME-ARP rental housing section, and(2)the HOME-ARP
funds are part of the original financing for the project and the project meets the
requirements of this Notice.
g. Operating Cost Assistance—A PJ may pay ongoing operating cost assistance or
capitalize an operating cost assistance reserve for HOME-ARP-assisted units restricted
for occupancy by qualifying populations in a project where the PJ determines in its
underwriting that the reserve is necessary to maintain the HOME-ARP units' long-term
operational feasibility. However, HOME-ARP funds cannot be used for both a
capitalized operating cost assistance reserve and ongoing payments for operating cost
assistance during the minimum compliance period. The allowable amount of the reserve
shall not exceed the amount determined by the PJ to be necessary to provide operating
cost assistance for HOME-ARP units restricted for occupancy by qualifying populations
for the 15-year HOME-ARP minimum compliance period.
The operating cost assistance reserve for HOME-ARP units for qualifying households
must be held by the project owner in a separate interest-bearing account and sized,based
on an analysis of projected deficits remaining after the expected payments toward rent
by qualifying households are applied to the units' share of operating costs. Funds in a
capitalized operating cost assistance reserve can only be drawn to address operating
deficits associated with HOME-ARP units restricted for occupancy by the qualifying
populations. A PJ must use the definition of operating costs in this Notice in its
calculation of operating deficits to determine the amount of HOME-ARP funds needed
for an operating cost assistance reserve or when providing operating cost assistance.
Unexpended operating cost assistance reserve amounts remaining at the end of the
minimum compliance period must be returned in accordance with Section VI.B.24 of
this Notice.
A PJ may provide operating cost assistance to a HOME-ARP rental project to cover an
operating deficit associated with HOME-ARP units restricted for occupancy by
qualifying households except for when an operating cost assistance reserve is already
established for the project. Operating cost assistance committed to a project cannot be
provided beyond the HOME-ARP budget period, as described in Section VIII.C.4 of this
Notice.
Operating costs include costs for administrative expenses,property management fees,
insurance, utilities, property taxes, and maintenance of a unit that is designated as a
HOME-ARP-assisted unit and required to be occupied by a qualifying household. .
Operating costs must be reasonable and appropriate for the area, size,population(s)
served, and type of project.
Project administrative expenses include payroll costs, which are gross salaries and
wages paid to employees assigned to the property, including payroll taxes, employee
compensation, and employee benefits; employee education,training, and travel;
advertising; and general administrative costs which are costs for goods and services
24
required for administration of the housing, including rental or purchase of equipment,
supplies, legal charges, bank charges, utilities, telephone/internet services, insurance,
and other administrative costs that are reasonable and customary for the general
administration of a rental unit occupied by qualifying populations. HOME-ARP permits
the pro-rated staffing costs of a Resident Services Coordinator to be included in the
operating costs allocated to a HOME-ARP unit for low-income or qualifying households
if such costs are not already paid by another source. Typically, the role of a Resident
Services Coordinator is to arrange community activities for residents and link residents
to outside service agencies as needed.
A property management fee includes the total fee paid to a management agent by the
owner for the day-to-day management of a HOME-ARP rental unit restricted for
occupancy by qualifying populations. A management agent must cover its costs of
supervising and overseeing operations of a HOME-ARP unit out of the fee they receive.
A reserve for replacement must be based on the useful life of each major system and
expected replacement cost in a HOME-ARP project. Scheduled payments to a reserve
for replacement of major systems included in the operating costs allocated to a HOME-
ARP unit restricted for a qualifying household may be made from the operating cost
assistance reserve. A reserve for replacement allocated to the HOME-ARP units may
also be capitalized in the initial year of the minimum compliance period of the HOME-
ARP units. HOME-ARP funds cannot be used to both capitalize a reserve for
replacement and provide payments to the reserve for replacement from a capitalized
operating reserve during the minimum compliance period.
Supportive services costs are not eligible operating costs of HOME-ARP units, however,
qualifying households occupying HOME-ARP rental units may receive supportive
services through the HOME-ARP supportive services eligible activity.
6. Prohibited Activities and Fees: HOME-ARP may not be used for any of the prohibited
activities, costs or fees in 24 CFR 92.214, as revised by the Appendix to this Notice.
7. HOME-ARP Funds and Public Housing: HOME-ARP funds must be used in accordance
with the requirements in 24 CFR 92.213(a)-(c).
S. Commitment: The affordable housing requirements in the definition of Commitment in 24
CFR 92.2, including the provisions in(2) Commit to a specific local project, apply to rental
housing units assisted with HOME-ARP funds. This includes but is not limited to the
requirements that the PJ and project owner have an executed legally binding written
agreement under which HOME-ARP assistance will be provided to the owner for an
identifiable project for which all necessary financing has been secured, a budget and
schedule have been established, and underwriting has been completed and under which
construction is scheduled to start within 12 months of the agreement date.
9. Maximum Per-Unit Subsidy and Limitations on Costs: The maximum per-unit subsidy
established in NAHA does not apply to HOME-ARP units. PJs may pay up to 100 percent
of the eligible and reasonable HOME-ARP costs allocated to a HOME-ARP unit, including
25
operating cost assistance associated with units restricted for occupancy by qualifying
households. All costs paid by HOME-ARP funds must comply with the requirements of
this Notice and the Cost Principles at 2 CFR part 200, subpart E of the Uniform
Administrative Requirements, as amended.
10.Underwriting, Subsidy Layering: Before the PJ can commit HOME-ARP funds to a
project, it must evaluate the project to determine the amount of HOME-ARP capital subsidy
and operating cost assistance necessary to provide quality affordable housing that meets the
requirements of this Notice and is fmancially viable throughout the minimum 15-year
HOME-ARP compliance period. The PJ must evaluate the project in accordance with
underwriting and subsidy layering guidelines it has developed for HOME-ARP projects.
The PJ's project underwriting must include an in-depth review of underlying project
assumptions, development sources and uses, and projected operating income and expenses,
and the project's long-term financial viability to determine the project's need for HOME-
ARP assistance while preventing over-subsidization of the project. HUD anticipates that
project developers will rely on Low-Income Housing Tax Credit(LIHTC) financing,
HOME funds, Housing Trust Fund grants,project-based vouchers,project-based rental
assistance, operating cost reserves, state or local sources, or a combination of these and
other resources to create a feasible HOME-ARP project and maintain compliance with
HOME-ARP requirements. HOME-ARP units for qualifying households that do not receive
a commitment of project-based vouchers or project-based rental assistance may require both
deep capital subsidy and operating cost assistance to remain financially sustainable for the
minimum 15-year HOME-ARP compliance period. However, the PJ, through its
underwriting, must also determine that the HOME-ARP capital and operating subsidies do
not result in over-subsidization of the project.
To secure HOME-ARP rental units for qualifying households, HOME-ARP funds may be
invested in different types of projects, including permanent supportive housing,mixed-
finance affordable housing, and market-rate projects. While the viability of the HOME-
ARP units is the PJ's primary concern, it must not limit its underwriting analysis to the
HOME-ARP units. The long-term viability of HOME-ARP units is contingent upon the
financial health of the entire project. PJs must therefore take a holistic approach to
underwriting that examines the overall feasibility_of the entire project to determine that the
property will be financially sustainable for the duration of the 15-year HOME-ARP
compliance period.
For projects that will receive operating cost assistance through a capitalized operating cost
assistance reserve or on-going operating cost assistance for a specific period, the on-going
operating cost assistance or operating cost assistance reserve must be included in the
underwriting. Unless placed into an operating cost assistance reserve,operating cost
assistance committed to a project for a specific period cannot be provided beyond the budget
period, as described in Section VIII.C.4. of this Notice. HOME-ARP units that have
commitments for a form of project-based rental assistance must be underwritten with the
projected rental assistance and not with operating cost assistance. An operating cost
assistance reserve must be sized based on an analysis of projected operating deficits
26
remaining after the expected payments toward rent by qualifying households are applied to
the HOME-ARP unit's share of operating costs. While a PJ may offer on-going project
operating cost assistance instead of providing an operating cost assistance reserve, it may
find this approach makes it more difficult to develop HOME-ARP units.
a. Underwriting and Subsidy Layering Guidelines: PJs must develop standardized
underwriting guidelines for HOME-ARP rental projects. These guidelines must provide
for underwriting that accommodates and is appropriate for different types of projects.
For example, a standard market analysis does not provide the necessary data for a
project where 100%of the units are restricted as permanent supportive housing for
qualifying populations. In contrast, if a mixed-income property relies on rental income
from market-rate units to subsidize the operating costs of permanent supportive housing
units for which little or no tenant-paid rental income is projected, then a market study
confirming that the proposed market rents are achievable is needed to demonstrate the
long-term financial viability of the project.
PJs with existing HOME rental underwriting standards may use these standards as the
foundation for their HOME-ARP underwriting guidelines,but all PJs are required to
develop and implement standardized underwriting guidelines for HOME-ARP that
require the following:
i. An examination of the sources and uses of funds for the project and a determination
that costs are necessary and reasonable. In examining a project's proposed sources
and uses, a PJ must determine the amount of HOME-ARP development subsidy
required to fill the gap between other committed funding sources and the cost to
develop the project.
A developer fee is a permitted development cost under the HOME-ARP program,
but the PJ must review the fee and determine that it is reasonable. A PJ may set
limits on the developer fee and other fees (e.g., asset management fee, property
management fee) to be paid by HOME-ARP funds that differ from other funding
sources (e.g., LIHTC underwriting standards).
ii. An assessment of the current market demand for the proposed project.
(1) For HOME-ARP units for qualifying households, a market assessment is not
required. Rather, the PJ can demonstrate that there is unmet need among
qualifying populations for the type of housing proposed through their gap
analysis, CoC data, public housing and affordable housing waiting lists, point-
in-time surveys, housing inventory count, or other relevant data on the need for
permanent housing for the qualifying populations.
(2) For projects containing units restricted for occupancy by low-income
households or market-rate households,the PJ must conduct a market
assessment in accordance with 24 CFR 92.250(b)(2). A third-party market
assessment completed by the developer or another funder meets this
requirement,but the PJ must review the assessment and provide a written,
dated acknowledgement that it accepts the assessment's findings and
conclusions. The market assessment and the PJ's written, dated
27
acknowledgement must be retained for recordkeeping purposes.
iii. Review of and determination that the developer's experience and financial capacity
are satisfactory based on the size and complexity of the project. When assessing the
developer, the PJ must review, at minimum, prior experience with similar projects
and the current capacity to develop the proposed project. When determining
whether the developer has the financial capacity to undertake the project,the PJ
should examine financial statements and audits to determine the developer's net
worth,portfolio risk, pre-development funding, and liquidity.
iv. Firm written financial commitments for the project.
v. A careful review of the project's operating budget, including the basis for
assumptions, projections of a project's net operating income, and reasonably
expected changes in revenue and expenses during the minimum compliance period,
to determine if any HOME-ARP-funded operating cost assistance is necessary and if
applicable, an operating cost assistance reserve is sized appropriately. Operating
income of the project must be sufficient to cover operating expenses throughout the
minimum compliance period. For HOME-ARP units for qualifying households, the
proforma or budget projections should include any anticipated ongoing operating
cost assistance or draws from an operating cost assistance reserve, if applicable,that
will offset operating deficits associated with those units to demonstrate sufficient
operating support.
(1) If project-based vouchers or project-based rental assistance is or will be
awarded, this analysis must include that rental assistance revenue because
operating cost assistance cannot be used for units for qualifying households with
project-based vouchers or project-based rental assistance.
(2) A PJ's underwriting standards may permit projects to generate reasonable net
operating income throughout the minimum compliance period. However,
HOME-ARP operating cost assistance may only be used to offset operating
deficits, in accordance with the requirements of this Notice. Net operating
income resulting from HOME-ARP operating cost assistance is not permitted
and must be prohibited in the written agreement between the participating
jurisdiction_and_the-owner.
vi. An assessment of the project's overall viability through the minimum compliance
period based on the households (i.e., qualifying households, low-income households,
market-rate households) it will serve.
11.Property Standards: HOME-ARP rental units must comply with all property standards
applicable to rental projects required in 24 CFR 92.251 paragraphs (a) new construction, (b)
rehabilitation projects, (c)(1) and(2)acquisition of standard housing, (e) manufactured
housing, and(f)on-going property condition standards.
12.Determining Household Income: The PJ must require all HOME-ARP units to be
restricted for eligible households (i.e., either qualifying or low-income households)
28
throughout the minimum compliance period. Qualifying households are eligible for
admission to HOME-ARP rental units solely by meeting the definition of one of the
qualifying populations (i.e., HOME-ARP does not impose income restrictions on units
restricted for qualifying populations). If there is no income requirement in the qualifying
population's definition, a PJ is not required to perform an initial determination of household
income except as necessary to determine an affordable rental contribution by the qualifying
household or to establish eligibility for another funding source in the unit that imposes
income restrictions (e.g., LIHTC). Each subsequent year during the compliance period,
starting 1 year after initial occupancy,the PJ must use the definition of annual income as
defined in 24 CFR 5.609 to examine the income of qualifying households to determine the
household's contribution to rent. For low-income households, the PJ must use the definition
of annual income as defined in 24 CFR 5.609 to examine the household's income at initial
occupancy and each subsequent year during the compliance period to determine the
household's ongoing income eligibility and applicable rental contribution.
a. Qualifying populations: For purposes of establishing the qualifying household's rental
contribution after initial occupancy, a PJ must examine a HOME-ARP qualifying
household's income using 24 CFR 92.203(a)(1)(i) or(iii), starting 1 year after initial
occupancy. Each year during the minimum compliance period, the owner must examine
the household's annual income in accordance with any one of the options in 24 CFR
92.203(a)(1) specified by the PJ. A project owner who re-examines household income
through a statement and certification in accordance with 24 CFR 92.203(a)(1)(ii), must
examine the income of each household, in accordance with 24 CFR 92.203(a)(1)(i),
every sixth year of the compliance period. Otherwise, an owner who accepts the
household's statement and certification in accordance with 24 CFR 92.203(a)(1)(ii) is
not required to examine the household's income unless there is evidence that the
household's written statement failed to completely and accurately state information
about the household's size or income.
b. Low-income Households: In accordance with 24 CFR 92.252(h),the income of each
low-income household must be determined initially in accordance with 24 CFR
92.203(a)(1)(i), and each year following the initial determination during the minimum
compliance period in accordance with any one of the options in 24 CFR 92.203(a)(1)
specified by the PJ. An owner who re-examines household income through a statement
and certification in accordance with 24 CFR 92.203(a)(1)(ii), must examine the income
of each household, in accordance with 24 CFR 92.203(a)(1)(i), every sixth year of the
minimum compliance period. Otherwise, an owner who accepts the household's
statement and certification in accordance with 24 CFR 92.203(a)(1)(ii) is not required to
examine the household's income unless there is evidence that the household's written
statement failed to completely and accurately state information about the household's
size or income.
c. Households Assisted by Other Programs: Notwithstanding paragraphs (a) and (b), if a
family is applying for or living in a HOME-ARP-assisted rental unit, and the unit is
assisted by a Federal or State project based rental subsidy then a PJ must accept a public
housing agency, section 8 project owner, or CoC recipient or subrecipient's
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determination of the family's annual income and adjusted income under that program's
rules and does not need to obtain source documentation in accordance with 24 CFR
92.203(a)(1) or calculate the annual income of the family. If a family is applying for or
living in a HOME-ARP rental unit, and the family is assisted by a Federal tenant-based
rental assistance program(e.g. housing choice vouchers)then a PJ may choose to accept
the rental assistance provider's determination of the family's annual and adjusted
income under that program's rules without need for review under 24 CFR 92.203(a)(1).
13. Rent limitations: This Notice establishes rent limits for HOME-ARP units restricted for
qualifying populations and for units that may be restricted for low-income households.
a. Units Restricted for Occupancy by Qualifying Households: In no case can the HOME-
ARP rents exceed 30% of the adjusted income of a household whose annual income is
equal to or less than 50% of the median income for the area, as determined by HUD,
with adjustments for number of bedrooms in the unit. HUD will publish the HOME-
ARP rent limits on an annual basis.
Notwithstanding the foregoing, a unit that receives a Federal or state project-based rental
subsidy and is occupied by a qualifying household that pays as a contribution to rent no
more than 30 percent of the household's adjusted income,may charge the rent allowable
under the Federal or state project-based rental subsidy program (i.e., the tenant rental
contribution plus the rental subsidy allowable under that program). If a household
receives tenant-based rental assistance, the rent is the rent permissible under the
applicable rental assistance program(i.e., the tenant rental contribution plus the rental
subsidy allowable under that rental assistance program).
The rent limits for HOME-ARP units for qualifying households include the rent plus the
utility allowance established pursuant to Section VI.B.13.d of this Notice.
b. Rent limitations—low-income households: HOME-ARP rental units occupied by low-
income households must comply with the rent limitations in 24 CFR 92.252(a) (i.e., the
lesser of the Fair Market Rent for existing housing for comparable units in the area, as
established by HUD, or a rent equal to 30 percent of the income of a family at 65
percent of median income for the area, as determined_by HUD, with adjustments for
number of bedrooms in the unit). Notwithstanding the foregoing,when a household
receives a form of Federal tenant-based rental assistance(e.g.,housing choice vouchers),
the rent is the rent permissible under the applicable rental assistance program(i.e.,the
tenant rental contribution plus the rent subsidy allowable under the rental assistance
program). The rent limits for low-income households apply to the rent plus the utility
allowance established pursuant to Section VI.B.13.d of this Notice.
c. Rent limitations—Single Room Occupancy (SRO) Units: A HOME-ARP rental project
may consist of SRO units. For the purposes of HOME-ARP rental, a SRO unit is
defined as a unit that is the primary residence of the occupant(s) and must at least
contain sanitary facilities but may also contain food preparation facilities. A project's
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designation as a SRO cannot be inconsistent with the building's zoning and building
code classification.
If the SRO units have both sanitary and food preparation facilities, the maximum
HOME-ARP rent is based on the zero-bedroom fair market rent. If the SRO unit has
only sanitary facilities, the maximum HOME-ARP rent is based on 75 percent of the
zero-bedroom fair market rent. The rent limits for SRO units must also include the
utility allowance established pursuant to Section VI.B.13.d of this Notice.
d. Initial Rent Schedule and Utility Allowance: The PJ must establish maximum
allowances for utilities and services and update the allowances annually. The PJ may
adopt the utility allowance schedule of the PHA.
The PJ must review and approve the HOME-ARP rents proposed by the owner, subject
to the HOME-ARP rent limitations. For HOME-ARP units where the tenant is paying
utilities and services (e.g., trash collection), the PJ must determine that the rent for the
unit does not exceed the maximum rent minus the monthly allowance for utilities and
services.
14. Tenant Contribution to Rent—Qualifying Households: The PJ must determine that the
qualifying household's contribution to rent is affordable to the qualifying household based
on a determination of the household's income. If the household is receiving project-based
or tenant-based rental assistance, the household cannot be required to contribute more
towards rent than the amount permitted by the requirements of the applicable rental
assistance program(See Section VI.B.13.a of this Notice). If a qualifying household is not
receiving project-based or tenant-based rental assistance and cannot contribute any income
toward rent, or the contribution is insufficient to cover the unit rent, the project owner may
draw from the project's operating cost assistance reserve if projected rental revenue minus
the operating costs of the unit results in a deficit. If an operating cost assistance reserve was
not capitalized at project completion:
• The PJ may provide ongoing HOME-ARP operating cost assistance to cover the
operating deficits associated with units occupied by qualifying households, subject
to the requirements in this Notice.
• The qualifying household may receive HOME-ARP TBRA to remain housed in the
HOME-ARP rental unit or the PJ may offer, in conjunction with a qualifying
household's admittance into a HOME-ARP rental unit, a simultaneous award of
supportive services to the qualifying household in accordance with Section VI.D of
this Notice. Any provision of supportive services must comply with all requirements
of Section VI.D. of the Notice and the PJ's policies and procedures.
• Operating cost assistance, HOME-ARP TBRA,and supportive services funds
committed to a project cannot be provided beyond the budget period for the HOME-
ARP funds, as described in Section VIII.C.4 of this Notice.
15.Changes in Income and Over-income Households:
A household that met the definition of one of the HOME-ARP qualifying populations at
initial occupancy and whose annual income at the time of income re-certification is above
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50 percent of median income for the area but at or below 80 percent of the median income
for the area must pay the rent specified in 24 CFR 92.252(a).
HOME-ARP-assisted units restricted for low-income households continue to qualify as
HOME-ARP rental housing despite a temporary noncompliance caused by increases in the
incomes of existing households if actions satisfactory to HUD are taken so that all vacancies
are filled in accordance with HOME-ARP requirements until the noncompliance is
corrected.
A qualifying or low-income household that is not low-income at the time of income re-
certification(i.e.,whose income is above 80 percent of the median income for the area)
must pay rent that complies with the over income regulatory requirements at 24 CFR
92.252(i)(2), which includes requirements applicable to HOME units that also have LIHTC
restrictions.
16. Unit Designation: The PJ must determine the number of HOME-ARP units in the project
restricted for qualifying households and low-income households,respectively, and whether
the units are fixed or floating units at the time of project commitment. The total number of
HOME-ARP rental units restricted for occupancy by qualifying households and the total
number of HOME-ARP rental units restricted for low-income households must be identified
as separate totals in the written agreement. In a project containing HOME-ARP and other
units, the PJ must designate fixed or floating HOME-ARP units in accordance with 24 CFR
92.252(j). The PJ must maintain this unit mix throughout the compliance period.
17. Maintaining Unit Mix: At the time of admission to a HOME-ARP rental unit, a household
must meet the definition for at least one qualifying population or be determined to be a low-
income household, depending on the applicable HOME-ARP restriction on the rental unit to
which it is being admitted and in accordance with the written agreement.
For HOME-ARP rental units restricted for occupancy by qualifying populations, a
household that meets the definition of a qualifying population at the time of admission
retains its eligibility to occupy a HOME-ARP rental unit restricted for occupancy by
qualifying populations, irrespective of changes in income or whether the household
continues to meet the definition of a qualifying population after initial occupancy. As an
example, a household that qualifies as "Homeless" at admission does not meet the Homeless
defmition once the household occupies a HOME-ARP unit but remains a qualifying
household and is eligible to remain in a HOME-ARP rental unit restricted for qualifying
populations. Income determinations for qualifying households are therefore only for
purposes of establishing a qualifying household's rental contribution as described in Section
VI.B.15 of this Notice and not for maintaining continued eligibility in the HOME-ARP
program. In a project with floating units, PJs are encouraged but not required to shift the
HOME-ARP qualifying population designation to another unit to serve another qualifying
household if the household's income subsequently is certified to be at or above 80 percent
AMI and the household no longer meets the definition of any qualifying population.
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For HOME-ARP rental units restricted for occupancy by low-income households, units will
be considered temporarily out of compliance if the household's income increases above 80
percent of area median income. The requirements for correcting any noncompliance using
vacancies or redesignation of units depends on whether the HOME-ARP rental units are
fixed or floating and whether other funding sources (e.g., LIHTC) impose income or other
restrictions on the units. Please note, in accordance with the requirements in 24 CFR 92.253
and in Section VI.B.19.c, an increase in a tenant's income does not constitute good cause to
evict or refuse to renew a tenant's lease, regardless of program requirements associated with
other funding sources such as LIHTC. In addition, compliance with unit restrictions for
low-income households requires adjustment of rents as described in Section VI.B.15 of this
Notice.
18.Minimum Compliance Period: HOME-ARP-assisted units must comply with the
requirements of this Notice for a minimum period of 15 years, irrespective of the amount of
HOME-ARP funds invested in the project or the activity being undertaken. A PJ may
impose a longer compliance period but should plan for the project's financial feasibility for
the longer period without HOME-ARP funds. The PJ may not use HOME-ARP funds to
provide operating cost assistance, including a capitalized operating cost assistance reserve,
to cover deficits during a PJ's extended compliance period.
If a project-based rental assistance Housing Assistance Payments(HAP)contract is awarded
to a HOME-ARP rental project,a PJ must impose a minimum compliance period that is the
greater of 15 years or the term of the HAP contract. PJs are also encouraged to extend
restrictions for occupancy of the HOME-ARP units in accordance with the requirements in
this section to match the term of eligible HAP contract renewals.
The provisions at 24 CFR 92.252(e)(1)-(4) apply, including the requirement that the PJ must
impose the HOME-ARP rental requirements through a deed restriction, covenant running
with the land, legally binding agreement restricting the use of the property and recorded on
the property in accordance with State recordation laws, or other mechanisms approved by
HUD. The chart providing minimum affordability periods based on rental housing activity
that is contained in 24 CFR 92.252(e) does not apply. The enforceable restriction must
provide that units assisted with HOME-ARP comply with the requirements of this Notice
throughout the minimum 15-year compliance period, including:
a. Units restricted for qualifying populations must be occupied by households that met the
definition of a qualifying population at the time of initial occupancy. The household's
contribution toward rent during this period must be affordable in accordance with
Section VI.B.14 of this Notice. The rents for these units must comply with the rent
limitations established in this Notice, including the rent provisions specified in 24 CFR
92.252(i)(2) for households whose income increases above 80 percent of area median
income and whose contribution to rent complies with the requirements in Section
VI.B.15.
b. Units available for low-income households must be continuously occupied by
households who are income eligible. The rents for these units must comply with the rent
33
limitations established in this Notice, including the rent provisions specified in 24 CFR
92.252(i)(2) for households whose income increases above 80 percent of area median
income.
c. The units must comply with the ongoing property condition standards of 24 CFR
92.251(f)throughout the compliance period as demonstrated by an on-site inspection
within 12 months of project completion and an on-site inspection at least once every
three years thereafter as required by 24 CFR 92.504.
d. Each household that occupies a HOME-ARP unit has an executed lease that complies
with the tenant protections required in Section VI.B.19 of this Notice.
19. Tenant Protections: PJs must verify that each household that occupies a HOME-ARP
assisted unit has an executed lease that complies with the tenant protection requirements of
this Notice. The lease must be either be between the project owner and the household or
between the project owner and a HOME-ARP sponsor with a sublease between the
qualifying household and HOME-ARP sponsor. A HOME-ARP sponsor is a nonprofit
organization that provides housing or supportive services to qualifying households and
facilitates the leasing of a HOME-ARP rental unit to a qualifying household or the use and
maintenance of HOME-ARP TBRA by a qualifying household.PJs may permit a HOME-
ARP sponsor to lease a HOME-ARP unit from an owner or execute a master lease with the
owner of a HOME-ARP project for HOME-ARP units restricted for occupancy by
qualifying households. The HOME-ARP sponsor may then sublease the HOME-ARP rental
unit to the qualifying household. The sublease between the HOME-ARP sponsor and the
qualifying household must comply with the rent limitations and tenant protection
requirements of this Notice.
a. Lease Requirement: There must be a lease between the qualifying household or the low-
income household and the owner of the HOME-ARP-assisted project in accordance with
24 CFR 92.253(a), except that a sublease is permitted if a HOME-ARP sponsor has
executed a master lease or lease with the project owner for the leasing of the units
restricted for occupancy by qualifying households.
b. Prohibited Lease Terms: The lease between the low-income-household,qualifying
household, or HOME-ARP sponsor and the HOME-ARP project owner or the sublease
between the HOME-ARP sponsor and a qualifying household may not contain any of
the prohibited lease terms specified in 24 CFR 92.253(b).
c. Termination of tenancy: An owner may not terminate the tenancy or refuse to renew the
lease of a tenant of a HOME-ARP unit or of a HOME-ARP sponsor with a sublease with
a qualifying household except for serious or repeated violation of the terms and
conditions of the lease; for violation of applicable Federal, State, or local laws; or for
other good cause. Similarly, a HOME-ARP sponsor may not refuse to renew a sublease
with a qualifying household except for serious or repeated violation of the terms and
conditions of the sublease; for violation of applicable Federal, State, or local laws; or for
34
other good cause. An increase in the tenant's or sublessee's income does not constitute
good cause.
In addition, if HOME-ARP funds were or are used to capitalize an operating cost
assistance reserve or there is a current contract for the PJ to provide operating cost
assistance to the project, an owner may not terminate the tenancy or refuse to renew the
lease of a qualifying household because of the household's inability to pay rent during
the minimum compliance period. A qualifying household's inability to pay rent shall
mean that the qualifying household cannot pay more than 30 percent of the qualifying
household's income toward rent, based on an income determination made by the PJ in
the last 30 days.
Where there is no capitalized operating reserve or other operating cost assistance to
cover the operating deficit for a HOME-ARP unit occupied by a qualifying household,
the PJ may assist the qualifying household with HOME-ARP TBRA or supportive
services in accordance with the requirements of this Notice.
The above tenant protections are necessary as HOME-ARP requires the PJ to perform
underwriting that reviews the operating feasibility of units occupied by qualifying
households for the 15-year compliance period to determine how HOME-ARP funds may
address the potential for qualifying households to have little to no income to contribute
toward rent.
To terminate or refuse to renew tenancy for any household occupying a HOME-ARP
unit, the owner must serve written notice upon the tenant(and the HOME-ARP sponsor
if the lease is between an owner and HOME-ARP sponsor) at least 30 days before
termination of tenancy, specifying the grounds for the action. In the case of a sublease,
to terminate or refuse to renew tenancy of a qualifying household,the HOME-ARP
sponsor, in accordance with the policy established by the PJ, must notify the PJ in
advance of serving written notice to the qualifying household and must serve written
notice upon the qualifying household at least 30 days before termination of tenancy,
specifying the grounds for the action.
20. Coordinated Entry and Project-Specific Waitlists: In accordance with Section IV.0 of
this Notice, PJs must determine whether an owner may use a CoC's CE, a CoC's CE and
other referral sources, or a project-specific waitlist, to select qualifying households for
HOME-ARP units restricted for occupancy by qualifying populations. PJs will make this
determination on a project-by-project basis. Regardless of which method is selected, in all
cases, the PJ must use a project-specific waitlist when selecting households to occupy units
restricted for occupancy by low-income households. Any preferences among qualifying
households must be disclosed in the HOME-ARP allocation plan through the PJ's public
participation process in accordance with Section V.C. of this Notice. The written agreement
between the PJ and the project owner must specify the method the owner must use for
selecting qualifying households for admission to HOME-ARP units.
a. The owner of a HOME-ARP rental project must adopt and follow written tenant
selection policies and criteria for HOME-ARP units that:
35
i. Limits eligibility to households that meet one of the HOME-ARP qualifying
populations definitions or low-income households in accordance with HOME-
ARP requirements; Preferences for households in one or more of the HOME-
ARP qualifying populations must comply with the PJ's preferences and the PJ's
policies and procedures for applying those preferences, if any, and must not
violate nondiscrimination requirements in 24 CFR 92.350.
ii. Do not exclude an applicant with a voucher under the section 8 Housing Choice
Voucher Program (24 CFR 982), or an applicant participating in HOME,
HOME-ARP or other Federal, state or local tenant-based rental assistance
program because of the status of the prospective tenant as a holder of such a
certificate, voucher, or comparable tenant-based assistance document;
iii. Limits eligibility or gives a preference to a particular qualifying population or
segment of the qualifying population if permitted in its written agreement with
the participating jurisdiction(and only if the limitation or preference is described
in the participating jurisdiction's HOME-ARP allocation plan). A preference for
households in one or more of the HOME-ARP qualifying populations must
comply with the PJ's determined preference(s)and the PJ's policies and
procedures for applying the preference(s), if any;
iv. Any limitation or preference must not violate nondiscrimination requirements in
24 CFR 92.350. If the PJ requires the use of a project-specific waitlist to select
qualifying households and/or low-income households for occupancy of HOME-
ARP units, provide for the selection of households from a written waiting list in
the chronological order of their application, insofar as is practicable;
v. Gives prompt written notification to any rejected applicant of the grounds for any
rejection; and,
vi. Complies with the VAWA requirements as described in 24 CFR 92.359.
b. Project-Specific Waitlist—Low-Income Households: A project owner must use a
project-specific waitlist to select households to occupy units restricted for occupancy
by low-income households in accordance with the tenant selection requirements of
24 CFR 92.253(d).
21. Project Completion and Occupancy: HOME-ARP rental projects must meet the
definition of project completion at 24 CFR 92.2. If the PJ fails to complete a project within
4 years of project commitment, it must comply with the terminated project requirements at
24 CFR 92.205(e)(2). If the HOME-ARP units are not occupied by eligible qualifying
households or low-income households within six months following project completion, the
PJ, as applicable, must submit to HUD information on its efforts to coordinate with a CoC,
homeless service providers, social service, and other public agencies to fill units for
qualifying households or must submit marketing information and, if appropriate, a
marketing plan to fill units for low-income households. The PJ must repay any HOME-
ARP funds invested in units that are not rented to eligible qualifying or low-income
households within 12 months of project completion.
22.Penalties for Noncompliance: The PJ must repay HOME-ARP funds invested in rental
housing that is terminated before completion or otherwise does not comply with initial or
ongoing requirements of this Notice during the compliance period, as follows:
36
ti
a. If the noncompliance or termination occurs within the first 10 years of the compliance
period, the PJ must repay the entire amount of HOME-ARP funds invested in the
project.
b. If the noncompliance or termination occurs in years 11 through 15, the repayment
amount will be reduced by 20 percent for each year beyond the initial 10-years during
which time the project was compliant.
Repayment of the HOME-ARP funds is not required if the project owner sells or transfers,
either voluntarily or involuntarily,the HOME-ARP project during the compliance period if
(1) the HOME-ARP restrictions remain, (2)the project and new project owner continues to
comply with all HOME-ARP requirements, and(3)any HOME-ARP funds remaining in a
project's operating cost assistance reserve or reserve for replacement remain with the project
and convey upon sale or transfer of the project as a restricted operating cost assistance
reserve or reserve for replacement subject to HOME-ARP Notice requirements.
23. Operating Cost Assistance Reserve-Management and Oversight: The PJ must require
that any HOME-ARP funds expended for project operating cost assistance reserves are held
by the project owner in a separate interest-bearing account. The PJ must require the project
owner to request written approval from the PJ prior to disbursing funds from the project
operating cost assistance reserve. The PJ must review each requested distribution from the
operating cost assistance reserve, including supporting documentation, to determine that the
distribution is reasonable and necessary to cover the operating deficit associated with
HOME-ARP units occupied by qualifying households. The PJ must, no less than annually,
review the operating cost assistance reserve account to determine that the account is
appropriately sized based on the projected operating deficits of HOME-ARP units restricted
for occupancy by qualifying households. The PJ may require the project owner to enter into
a deposit account control agreement for the operating cost assistance reserve where the PJ
must approve disbursements from the account.
24.End of Compliance Period and Return of Operating Cost Assistance Reserve: Any
unexpended operating cost assistance reserve remaining at the end of the compliance period
must be returned as follows:
a. If the HOME-ARP rental project will continue to operate in accordance with the
HOME-ARP requirements and serve qualifying households beyond the HOME-ARP 15-
year compliance period as demonstrated by enforceable restrictions imposed by the PJ,
the project can retain the operating cost assistance reserve amount to address any
operating deficits associated with the HOME-ARP units occupied by qualifying
households.
b. If the HOME-ARP project will not continue to operate in accordance with the HOME-
ARP requirements and serve qualifying households beyond the 15-year HOME-ARP
compliance period and the HOME-ARP grant has expired or is closed out, the remaining
operating cost assistance reserve funds must be deposited in the PJ's local HOME
37
account and recorded as HOME program income receipt in the Integrated Disbursement
and Information System(IDIS)and used for eligible costs under 24 CFR part 92.
C. Tenant-Based Rental Assistance (TBRA)
HOME-ARP funds may be used to provide tenant-based rental assistance to qualifying
households("HOME-ARP TBRA"). In HOME-ARP TBRA, the PJ assists a qualifying
household with payments to cover the entire or insufficient amounts that the qualifying
household cannot pay for housing and housing-related costs, such as rental assistance, security
deposits, and utility deposits. HOME-ARP TBRA assisted households may choose to rent a
unit in a HOME-ARP rental project or any other eligible rental unit. HOME-ARP TBRA is a
form of rental assistance that is attached to the household and not a particular rental unit.
Therefore, the HOME-ARP TBRA assisted household may choose to move to another unit with
continued HOME-ARP TBRA as long as the new unit meets the applicable property standards
of this Notice. If a HOME-ARP TBRA assisted household chooses to move, the rental
assistance contract terminates and a new rental assistance contract for the new unit will be
executed according to HOME-ARP TBRA requirements. The HOME-ARP TBRA assisted
household must notify the PJ before moving in order to receive continued HOME-ARP TBRA.
1. Tenant Selection: Only individuals and families in the qualifying populations are eligible
to receive HOME-ARP TBRA assistance. PJs must perform tenant selection in accordance
with Section IV.0 of this Notice. The PJ must select qualifying households for HOME-
ARP TBRA in accordance with written tenant selection policies and criteria that are based
on local housing needs established in the HOME-ARP allocation plan. The PJ must follow
written tenant selection policies and criteria that:
a. Limit eligibility to households that meet one of the HOME-ARP qualifying populations
definitions in accordance with HOME-ARP requirements. Preferences for households
in one or more of the HOME-ARP qualifying populations, if any,must comply with the
preferences and/or method of prioritization in the PJ's HOME-ARP allocation plan and
the PJ's policies and procedures for applying such preferences, if any, and must not
violate nondiscrimination requirements in 24 CFR 92.350.
b. If the PJ selects HOME-ARP TBRA applicants off a waiting list, it must provide for the
selection of qualifying households from a written waiting list in accordance with the
PJ's preferences ormethod of prioritization in the chronological order of their-
application, insofar as is practicable.
c. Give prompt written notification to any rejected applicant of the grounds for any
rejection, and
d. Comply with the VAWA requirements as described in 24 CFR 92.359.
Finally, the PJ may offer, in conjunction with HOME-ARP TBRA assistance, a
simultaneous award of services in accordance with Section VI.D of this Notice, and also
provide particular types of other nonmandatory services that may be most appropriate for
persons with a special need or a particular disability. Any provision of supportive services
must comply with all requirements of Section VI.D of the Notice and the PJ's policies and
procedures.
38