A. A HOME participating jurisdiction's commitment total, as shown on HUD's HOME Deadline Compliance Status Report, reflects its commitments in HUD's Integrated Disbursement and Information System (IDIS) at the end of each month. Often, HUD's HOME Deadline Compliance Status Report indicates that a HOME PJ has a commitment shortfall at the time of its statutory two-year commitment deadline because while it has committed funds to organizations or projects, it has not yet entered those commitments in IDIS. Before deobligating the shortfall amount, HUD, through its field offices, allows the PJ to submit documentation of project commitments not reflected in IDIS at the time of the PJ's commitment deadline. Recently, much of the documentation that has been submitted to the field office from HOME PJs has not satisfied the minimum requirements for an acceptable HOME commitment. This HOMEfires describes the required documentation of commitment for HOME projects not entered in IDIS prior to the commitment deadline.
Compliance with Commitment Deadline
The HOME Final Rule requires HUD to reduce or recapture HOME funds in the HOME Investment Trust Fund by the amount of any funds in the United States Treasury account that are not committed within 24 months after the last day of the month in which HUD notifies the PJ of HUD's execution of the HOME Investment Partnership Agreement (24 CFR § 92.500(d)(1)(B)).
Compliance with this requirement is tracked monthly for all HOME PJs on the HOME Deadline Compliance Status Report. The report can be found on the HOME Reports web page: http://www.hud.gov/offices/cpd/affordablehousing/reports/.
Should the HOME Deadline Compliance Status Report as of the PJ's deadline date show a commitment shortfall, it does not always mean that the PJ has not met its requirement. For instance, the PJ may have committed the HOME funds but not entered the commitment in IDIS prior to its deadline. In this situation, HUD requires certain documentation to substantiate that the PJ's commitment requirement was met prior to the deadline date.
The HOME Final Rule at § 92.2 defines commitment as: "the participating jurisdiction has executed a legally binding agreement with a State recipient, a subrecipient or a contractor to use a specific amount of HOME funds to produce affordable housing or provide tenant-rental assistance; or has executed a written agreement reserving a specific amount of funds to a community housing development organization; or has met the requirements to commit to a specific local project..." as described at § 92.2 Commitment, paragraph (2).
1. Commitments in IDIS
The easiest way to demonstrate HOME commitments is through IDIS. HOME activities funded with EN funds in IDIS are counted as HOME commitments. In addition, commitments in IDIS include general subgrants to state recipients and subrecipients (SU fund type in IDIS); reservations to CHDOs (CR fund type in IDIS); and commitments to administrative, CHDO operating, CHDO capacity building, or CHDO loans activities (AD, CO, CC, or CL fund types in IDIS).
NOTE: A PJ may never set up a project or subgrant in IDIS before it executes a legally-binding written agreement committing the funds.
2. Commitments not in IDIS
In addition, HUD allows PJs to submit documentation of HOME commitments executed prior to the commitment deadline, but not in IDIS at the time of the deadline. Specifically, the same documentation that supports commitments in IDIS -- a legally-binding written agreement or contract between the PJ and a state recipient, subrecipient, program recipient (including homeowners, housing authorities and property owners) or contractor, signed and dated by both parties on or before the deadline date committing a specific amount of HOME funds to a specific HOME project -- is evidence of a HOME commitment that has not been entered into IDIS.
In order to demonstrate that the written agreement was executed properly by the parties prior to the deadline, the signature page should contain the signatures of all parties along with the date of execution. An agreement that is dated only on the first page is not acceptable as a commitment. Given the importance of the execution and dating, it may be in the PJ's best interest to have signatures notarized or otherwise formally attested to on the signature page of the agreement.
If the PJ owns the land and/or is the developer, HUD will accept as a HOME commitment evidence that construction is expected to start within 12 months. If the construction will be undertaken by contractors, such evidence should include completed architectural plans and, if required, the construction permit, along with an executed contract for construction of the project. If the construction will be undertaken by the PJ's employees, the evidence should include completed architectural plans and, if required, the construction permit, along with a schedule for construction work.
Since "land banking" is not allowed in the HOME Program, should the PJ acquire land with HOME funds with the intention to convey it to a developer for a HOME project, there must be an actual project before the PJ may use HOME funds for acquisition, and the PJ must document that construction on the specific project will begin within 12 months.
HUD also accepts as evidence of HOME commitment a written agreement signed by both a PJ and a CHDO reserving a specific amount of HOME funds to produce affordable housing, committing funds to a specific CHDO project, or committing a specific amount of HOME funds for CHDO operating costs not already entered in IDIS. In addition, during the first 24 months a jurisdiction is a PJ, a written agreement committing funds for CHDO capacity building signed by the PJ and the entity providing the CHDO capacity building assistance is considered evidence of HOME commitment. Like other written agreements, the signatures of all parties signing written agreements for CHDO set aside, CHDO operating, or CHDO capacity building funds must be accompanied by the execution date.
NOTE: A written agreement may provide that the HOME funds for a specific project are conditioned upon compliance with the environmental review requirements of the National Environmental Policy Act and HUD regulations in 24 CFR Part 58.
Summary of Commitments
If the data entered into IDIS indicate a shortfall at the time of the PJ's commitment deadline and the HUD field office has requested, received, and reviewed documentation submitted by the PJ as evidence of commitments prior to the deadline not entered in IDIS, the amount of commitments accepted by the field office will be deducted from the PJ's commitment shortfall. In order to document the deduction of these commitments accepted by the field office, but not reflected in IDIS at the time of the PJ's commitment deadline, the field office must submit a summary of the documentation it counted as commitments to the Office of Affordable Housing Programs (OAHP) in Headquarters. The summary must include the types of agreements, the dates of agreement execution, the agreement amounts, and field office verification that the agreements were not set up as HOME activities in IDIS as of the date of the PJ's commitment deadline. In cases where the evidence of commitment is unclear or uncertain, the field office may wish to submit the documentation of commitments received from the PJ for OAHP review and concurrence with the field office's determination.