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Trends In HOME Monte Franke, Franke Consulting Group.

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Presentation on theme: "Trends In HOME Monte Franke, Franke Consulting Group."— Presentation transcript:

1 Trends In HOME Monte Franke, Franke Consulting Group

2 What We Will Discuss Recent allocation trends 2012 Appropriations Act Proposed Rule Resale/Recapture Notice 2012 Arizona Housing Forum2

3 AZ HOME Allocations: 2003 - 2012 2012 Arizona Housing Forum3 ADDI Mesa Consortium Post Article Stimulus 2010 data

4 2012 38% cut nationally But new data (2010 Census & 2005-09 ACS) offset some of that loss in AZ; data impact State: + 0.7% Maricopa: + 26.7% Tucson/Pima: + 1.3% Mesa: + 12.5% Phoenix: + 4.5% 2012 Arizona Housing Forum4

5 2013 Allocation? Possible increase to $1.2 Billion (+ 20%)? Impact of sequestration? –HOME projected to lose $84 Million (- 8.4%) 2012 Arizona Housing Forum5

6 FY 2012 Appropriation Law Applies to activities that receive FY 2012 funds (set up in IDIS under 2012 Annual Plan) Requirements: 1.Four-year project completion deadline 2.Project underwriting certification 3.Deadline for sale of homebuyer units 4.CHDO development capacity 2012 Arizona Housing Forum6

7 4 Year Project Completion Deadline Projects must be completed & ready for occupancy within 4 years of written agreement execution –Projects will be involuntarily terminated before completion & HOME funds must be repaid –Applies to 2012 Con Plan/ Annual Action Plan projects –HUD may grant a one-year extension 72012 Arizona Housing Forum

8 Project Underwriting Before executing a legally binding written agreement, a PJ must: –conduct an underwriting review –assess developers capacity and fiscal soundness –examine neighborhood market conditions to ensure adequate need for project 82012 Arizona Housing Forum

9 Deadline for Sale of Homebuyer Units Units not sold (or ratified sales contract) within 6 months of construction completion must be converted to HOME rental unit –HUD has no exception authority 92012 Arizona Housing Forum

10 CHDO Development Capacity PJ may not reserve FY 2012 funds to a CHDO unless CHDO has staff with demonstrated development experience Paid employees responsible for day-to-day operations (volunteers, board members, and consultants are not staff) Projects of similar size, scope, complexity Applies to FY 2012 CHDO set-aside funds 102012 Arizona Housing Forum

11 HOME Proposed Rule Published: December 16, 2011 Comments were due 2/14/12 Addressing cumulative list of program concerns: Enhance PJ accountability and oversight Improve CHDO capacity and performance Incorporate best practices as requirements Final Rule expected: Fall 2012 Updates to trainings & certifications will follow 112012 Arizona Housing Forum

12 Proposed Rule Changes Deadlines: completion, sales, rent-up Underwriting – all projects Physical standards expanded – energy, useful life, interim inspections, CHDOs – no reservations, staff, independence Owner price/value limit change Rental project monitoring & workouts 2012 Arizona Housing Forum12

13 Resale/Recapture Notice CPD-12-003 (January 2012) HUD FOs must approve R/R plan (ConPlan) Written agreement separate from loan instruments Repayment if non-compliance PJ should have resubordination policy 2012 Arizona Housing Forum13

14 Bottom Line 1.No commitment if youre not ready 2.No homebuyer units on spec 3.CHDOs must have staff capacity 4.If you cant complete, you must remit 5.Review your resale/recapture policy & docs 6.Perform or risk losing more funding for housing The metric of HOME success is completed & occupied units 2012 Arizona Housing Forum14

15 Links HOME: 2012 requirements: Proposed rule: Resale/Recapture Notice: Mailing list able%20Housing%20Programs&list=home-l 2012 Arizona Housing Forum15

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