1. Changes to HOME Rule Housing Summit 2014 Dan Puccetti, Laurie LindenDill and Debbie Davis, Presenters

2. Today’s Agenda  HOME Program Background  Housing Development and HOME  CHDO Set Aside and CHDO Operating  HOME Rehab changes  HOME Homeownership changes  Other HOME changes  HOME related activities 2

3. HOME Program Background  Created by the National Affordable Housing Act of 1990 (NAHA) & most recently amended August 23, 2013  MFA receives funds annually from HUD  $3.8 MM in 2014, down 50% from 2010  Allocated to various MFA departments  See HUD’s website for more detail https://www.onecpd.info/home/home-final-rule 3

4. Housing Development (HD)  HOME used throughout New Mexico, except Albuquerque & Las Cruces  Awards made throughout the year, on a first come, first served basis  HD works only with developers and, at this time, offers only a rental program  HOME units must be occupied by families earning at or below 60% AMI 4

5. Housing Development (HD)  HOME provides “gap” financing to enhance affordability of rental projects  MFA limits are more restrictive than HUD to better allocate a scarce resource  Most HOME awards are structured as long term low-interest rate loans but may be forgivable if 30% AMI families are served 5

6. Housing Development (HD)  Max HOME with 9% LIHTC $400K for CHDOs or $600K for non-CHDOs  Max HOME with 4% or no LIHTC $600K for CHDOs or $800K for non-CHDOs  Subject to per unit limits and not to exceed 80% of total development cost (see http://www.housingnm.org/home-rental-loan-program)  Projects must be inspected at completion 6

7. CHDOs & Set-Aside  Community Housing Development Organizations (CHDOs) are designated by MFA, eligible to apply for Set-Aside and Operating Funds  CHDO Set-Aside – 15% of HOME funds are for housing development investments by qualified CHDO’s acting as owners, developers, or sponsors of the housing (i.e. must create housing) 7

8. CHDO Operating Funds  Operating: CHDOs may apply for $40K in operating funds ($50K in new service area) with CHDO Set-Aside award & recertification (must apply for all at the same time)  May only receive one operating award annually. See website for more detail: http://www.housingnm.org/community-housing-development-organizations-chdo 8

9. Owner-Occupied Rehab  Projects and requests for reimbursements uploaded to Secure Data Transfer site  Project timeline expanded to 180 days  Still no guidance from HUD on UPCS for rehab (property inspections) 9

10. Owner-Occupied Rehab  Additional oversight by MFA to include:  Comparison of cost estimate to actual charges  Payment of final invoice contingent upon 3rd party inspection beginning 2015  New financial audit requirements for FY2014  Certified Auditor that is on State Auditor’s List http://www.saonm.org/approved_audit_firms and  Auditing firm must be procured a minimum of every 3 years 10

11. Other Changes  Added new eligible forms of homeownership:  Added community trust land  Manufactured housing on ground lease at least equal to affordability  UPCS – uniform national standards, adopted for HOME rehabilitation, acquisition, and tenant-based rental assistance (effective January 24, 2015) 11

12. Other Changes  Income Determinations  PJs must examine at least 2 months of source documentation  PJs must count the income of all persons in the household, including nonrelated individuals  Project Completion Deadline – 4 years from date written agreement executed or PJ must repay HOME funds 12

13. Other Changes  PJs can charge compliance monitoring fees for projects where HOME funds committed on or after August 23, 2013  Must be included as cost of project as part of project underwriting  Must be based on average actual cost of monitoring HOME-assisted rental property  All HOME-assisted homebuyers must receive housing counseling 13

14. Other changes  Requires underwriting of all HOME projects (rental and homebuyer) whether or not projects are assisted with other governmental assistance  PJs are required to establish utility allowances and to update annually  PJs must convert homebuyer units to rental if not sold within 9 months of completion of construction or rehabilitation 14

15. More others  Affirmative marketing procedures are extended to all HOME funded programs, including DPA, i.e., market the program, not the units  PJs must inspect each project before releasing funding 15