Update on HOME Funds
Over the past year Network staff have heard from a number of members that their local PJ’s (participating jurisdictions) are raising questions about restrictions on using HOME funds in CLT projects. We convened a small working group to review the specific concerns and then met with HUD staff to explain why these issues are so critical for our members. The issues are generally related to what kind of fees can be charged to homebuyers or sellers to support stewardship, whether CLTs can retain the right of first refusal on resale, and whether buyer-inititated programs are eligible for HOME funds. The Network submitted a formal letter to HUD in early February asking for clarification and guidance on these questions. We understand that HUD’s response will have significant implications for how our members can use HOME funds. We’ll keep you posted on what we learn and whether additional steps are necessary.
HUD has communicated that charging ground lease fees is permissible under the HOME program, but we are requesting a public FAQ for our members to reference.
Resale Fees: It is unclear whether CLTs may charge resale fees directly to buyers or sellers or indirectly to sellers through increasing the sales price upon resale.
Repair Fees or Deductions: It is unclear whether CLTs may charge repair/replacement fees to homeowners or whether CLTs may deduct the costs of needed repairs upon resale.
Right of First Refusal: It is unclear whether CLTs may retain the right of first refusal upon resale.
Buyer-initiated Programs: It is unclear whether buyer-initiated programs are eligible.