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Report and discussion related to forms of assistance for HOME single family construction activities
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BACKGROUND
The Single Family and Homeless Programs (SFHP) Division administers the HOME Single Family Program activities for TDHCA. HUD regulations grant Participating Jurisdictions considerable flexibility in determining how HOME assistance is structured, allowing investments to be made as forgivable loans, deferred payment loans, repayable loans, or through other mechanisms that support program goals. Federal rules also permit a shared net proceeds recapture approach, which allows a Participating Jurisdiction to recover a portion of net appreciation when a property is sold, transferred, or refinanced during the affordability period. This flexibility gives TDHCA the opportunity to design a policy that balances the goal of maintaining long-term affordability for homeowners with the need to preserve and replenish federal funds for program use.
In contrast to the Texas Bootstrap Loan (Bootstrap) Program, the HOME Program does not always require repayment of the investment of HOME funds. Our largest Single Family HOME activity with a construction component is Homeowner Reconstruction Assistance (HRA), which does not currently require repayment. Over the past three years, we have completed an average of 119 HRA projects per year (not requiring repayment), and an average of 43 Bootstrap projects per year (requiring repayment). We have not completed any Contract for Deed or Homebuyer Assistance with New Construction projects in this timeframe and have only completed ten Single Family Development projects.
Whether assistance is required to be repaid for Single Family HOME projects depends on the activity type, as shown below:
No Payment Required
Payment Required
Homeowner Reconstruction Assistance
* Conditional Grant Agreement with five-year term unless a loan is required by federal regulations; or
* Deferred forgivable loan with 15-year term and annua...
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