The HOME requirements at 24 CFR Part 92.300 require PJs to set-aside at least 15 percent of their HOME allocation for projects sponsored, owned, or developed by CHDOs. PJs may allocate more funds for CHDOs, but 15 percent is the minimum amount.
- CHDOs may also be a subrecipient under a PJ's HOME program, however, the funds committed will not count towards the 15% set-aside requirement.
PJs have 24 months after HUD signs the letter for the PJ's HOME agreement to identify and designate the CHDOs they plan to work with and reserve monies for their use. If the required funds are not reserved for CHDO use within this time period, they will be recaptured (returned to HUD).
- A CHDO should be aware of the time constraints and expenditure deadlines of the PJ with which they are working.
Funds may be reserved for CHDOs before specific projects are identified. However; for funds to be reserved, a written agreement must be executed between the CHDO and the PJ.
- The agreement must detail how the monies will be used. The agreement may be project specific or a more general description of planned activities and meet the HOME requirement for written agreements found at 24 CFR 92.504 (c)(3).
Examples of reserving CHDO set-aside funds
- Hometown wants to reserve $200,000 for Eastville CHDO to acquire, rehabilitate, and rent housing to very low-income tenants. Hometown describes the terms, conditions, and other obligations of the program (maximum HOME subsidy, terms of the loan, general location of the property, etc.) in a written agreement with Eastville CHDO. Hometown and Eastville CHDO do not have to fully specify or describe the specific properties to be acquired in order to fulfill the 24-month requirement for the reservation of CHDO funds.
- Hometown also wants to reserve $100,000 for Orange CHDO to develop a 100-unit apartment building at 4th and Main streets. Because the site and plans for the project are known, Hometown's written agreement with Orange CHDO may be specific to the project, describing all the terms and conditions of the development and it may also be used to commit funds to the project.