For Economic Development Committee April 24, 2024
TO: Honorable Economic Development Committee Members
APPROVAL: Colby Cataldi, Director of Community Development
FROM: Kim Dame, Administrative Analyst
Title
HOME Program Participating Jurisdiction Option 2024
Body
BACKGROUND
On April 15, 2024, the Department of Housing and Urban Development sent a preliminary notification of Rialto’s status as a new HOME Participating Jurisdiction (PJ). HOME is the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. As a HOME PJ the City will receive an annual allocation of HOME funds from HUD’s Office of Community Planning and Development to carry out HOME eligible activities.
The HOME Investment Partnerships Program (HOME) provides formula grants to states and localities that communities use - often in partnership with local nonprofit groups - to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people. HOME is the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. In general, under the HOME Investment Partnerships Program, HUD allocates funds by formula among eligible State and local governments to strengthen public-private partnerships and to expand the supply of decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for very low-income and low-income families.
ANALYSIS/DISCUSSION
The HOME program is dedicated exclusively to housing related activities, including building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people. The initial HOME allocation planning target for Rialto is estimated to be $375,115 and the city would need to provide a one-time amount of $124,885 to meet the initial participation threshold of $500,000 for the HOME program. HOME funds must be matched by nonfederal resources.
Each year after the initial allocation is received, the City’s allocation will be determined based on formula allocation under § 92.50 <https://www.ecfr.gov/current/title-24/section-92.50> that is equal to or greater than $750,000.
All Participating Jurisdictions (PJs) must contribute or match no less than 25 cents for each dollar of HOME funds spent on affordable housing. As the City draws funds from HOME Investment Trust Funds, they incur a match liability, which must be satisfied by the end of each federal fiscal year. The matching contribution adds to the resources available for HOME-assisted or HOME-eligible projects and must come in the form of a permanent contribution to affordable housing.
Generally, investments from state or local governments or the private sector qualify as matching contributions, whereas federal funds (such as CDBG) do not qualify. Eligible sources of a match for HOME funds include cash; donated construction materials or volunteer labor; value of donated land or real property; value of foregone interest, taxes, fees, or charges levied by public or private entities; investments in on-or offsite improvements; proceeds from bond financing; the cost of supportive services provided to families living in HOME units; and the cost of homebuyer counseling to families purchasing HOME-assisted units.
The HOME statute provides for a reduction of the matching contribution requirement under three conditions: 1) fiscal distress; 2) severe fiscal distress; and 3) for Presidentially declared major disasters covered under the Stafford Act. The potential for a HOME match reduction is determined by HUD every fiscal year.
FINANCIAL IMPACT
The initial HOME allocation planning target for Rialto is estimated to be $375,115 and the city would need to provide a one-time amount of $124,885 to meet the initial participation threshold of $500,000 for the HOME program. Staff will need to work with Finance to find available budget from the General Fund or other non-federal sources.
RECOMMENDATION
Staff recommends that the EDC receive the information and provide comments.