September 16, 2021
Affordable Housing Alert
Author(s): Anthony D. Ruvolo
On September 13, 2021, HUD issued Notice CPD-21-10t for the HOME-American Rescue Plan Program.
HUD issued Notice CPD-21-10 on September 13, 2021, to state the requirements for the use of $5 billion available for the HOME-American Rescue Plan Program authorized by the American Rescue Plan Act of 2021 (P.L. 117-2). The 97-page Notice addresses the eligible activities to benefit qualifying individuals and families, which include: (1) development and support of affordable housing, (2) tenant-based rental assistance, (3) supportive services, and (4) acquisition and development of non-congregate shelter units. Qualifying individuals and families include people who are homeless or at risk of homelessness, people fleeing domestic and other violence, and people facing housing instability.
A significant portion of the Notice focuses on HOME-ARP Rental Housing. At least 70% of all HOME-ARP rental units must be occupied by qualifying households. Up to 30% of the qualifying households may be “low-income” families with household income not exceeding 80% of area median income. A Participating Jurisdiction (PJ) may use project-specific waiting lists for referrals of qualified participants. A HOME-ARP rental project must be subject to a 15-year compliance period, although a PJ may impose a longer term. If a project is awarded a project-based HAP contract, the minimum term will be the greater of 15 years or the term of the HAP contract.
HUD acknowledges that there will be challenges underwriting HOME-ARP rental projects. A major challenge will be that the rent for a HOME-ARP unit occupied by a household whose annual income does not exceed 50% of area median must not exceed 30% of the household’s income. If such a tenant receives project-based or tenant-based rental assistance, the rent is permissible under the assistance program. The rent for a unit occupied by a low-income family whose income exceeds 50% of AMI but does not exceed 80% of AMI must not exceed the lesser of the FMR or 30% of 65% of AMI adjusted for the number of bedrooms. If such a tenant receives a form of federal tenant-based rental assistance, the rent is that allowed under the rental assistance program.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.
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