This Program is NOT For Tenant Rental/Utility Assistance!!
Overview
The HOME Investment Partnership Program (HOME) is designed to assist communities- often in partnership with local, not-for-profits, individuals, corporations, and public entities- to fund a wide range of affordable housing projects. These projects may include acquisition, rehabilitation, or new construction of affordable housing units for rental or homeownership. Affordable rental housing units created serve Extremely Low (below 50% AMI) and Very Low Income households (51-60% AMI) and affordable homeownership units created serve Very Low and Low Income households (below 80% AMI) based upon the current year Jersey City, NJ HUD Metro FMR Area Income Limits Summary.
Eligible Activities
Although various types of activities are eligible under the federal HOME Investment Partnership Program (HOME) regulations, applications for funds must be in conformance with the housing priorities in the County's submitted 2015-2019 Consolidated Plan. These priorities include: 1. Supporting the creation of new rental units through new construction or rehabilitation. Within this priority, there is also a focus on creating housing for individuals and families (under 55) and permanent housing for homeless individuals and families. 2. Priority will be given to any project that is consistent with County initiatives, including but not limited to: ending homelessness, housing for the very-low income, and redevelopment of foreclosed and/or abandoned properties.
Terms of Financing & Underwriting
The County's approach to providing HOME funds is to provide the "gap" financing necessary to make the project affordable under the HOME rental/purchase and income guidelines. The focus of this type of underwriting is to maximize the leveraging of private financing and minimize HOME funds. Detailed underwriting standard for rental housing projects are noted under the rental housing section of these guidelines. The County will consider providing HOME funds in the following manners: interest bearing loans, non-interest bearing loans, deferred loans (forgivable or repayable). Applicants may propose any of the forms listed above. However, loan proposals receive a higher priority.
It is also the position of the county to give higher priority to projects which request HOME funds as loans in order to replenish subsidy funds in order to fund future projects. All rental projects will be underwritten assuming a 30-year mortgage, at a current rate (determined by the County), with a 1.15 debt coverage ratio for the private financing. All income available at a 1.15 ratio must be used for private financing. Projects must maintain positive cash flow for the duration of the affordability period.
Guarantee
The County reserves the right to request a letter of credit, or other liquid security acceptable to the County, to ensure successful completion of the project. The amount of the letter of credit will be determined by the County. This letter of credit is particularly important when an owner is acting as a general contractor. In such a case the County will request a letter of credit in an amount equal to the difference between the contractor's cost and the County's cost to hire a general contractor through a public bidding process. Letters of credit must be irrevocable, non-documentary, issued by a reputable bank approved by the County and in a form acceptable to the County. Other forms of security will be subject to County approval.
Other Funding
HOME funds are not intended to be the sole source of project funding. Applicants are encouraged to seek out other sources of funds including but not limited to traditional lender financing, community development financial institution funding, Federal Home Loan Bank Affordable Housing Program funds, New Jersey Housing & Mortgage Finance Agency funding, local housing trust funds, private grants, etc. Projects where such funding is committed will receive a higher priority than projects that do not have committed funding. Disbursement of HOME Funds All owner equity must be invested in the project prior to the release of any County funds. The County will hold a retainage appropriate to the scope of the project until all required closeout documentation and initial occupancy data is provided.
Ineligible Projects
Projects that can be support adequate debt financing to complete the project or cannot demonstrate a need for HOME funds are ineligible. The minimum HOME subsidy per unit is $1,000. The maximum HOME subsidy per unit may not exceed 240% of the Sec. 234 Limit based on building type and unit size. Please see the Library Tab for further information.
Building Codes & Standards
All current State & Local Building Codes must be met at the completion of the project and in compliance with the federal Housing Quality Standards. All new construction and gut rehabilitation shall be designed to meet the Energy Subcode as set forth at N.J.A.C. 5:23-3.1. Projects are encouraged to be rehabilitated/constructed and certified to Energy Star, Enterprise Green Communities, LEED, or similar standard that incorporates whole house energy efficiency, water efficiency, and/or green materials. Rental housing property owners must maintain these housing standards for the duration of the regulatory period. Periodic inspections will be conducted by the County to ensure units are maintained and provide a safe, healthy living environment. Site and Neighborhood Standards Housing provided through the HOME Program must promote greater choice of housing opportunities. Neighborhood amenities such as access to transportation, healthcare facilities, supportive services, targeted development areas, environmentally safe areas, and access to grocery stores and banking will be considered. The County reserves to reject an application if it deems the site to be unacceptable.
Permanent Homeless Housing
The Hudson County Alliance to End Homeless, the local administrator of the Continuum of Care, operates under Coordinated Assessment. All supportive housing for the homeless constructed with Hudson County HOME funds must lease these units through the Coordinated Assessment process. Please see the Coordinated Assessment Policies under the Library Tab. The U.S. Department of Housing and Urban Development is encouraging municipalities to use resources such as the HOME Program to assist in the creation of permanent housing for the homeless with a focus on the chronically homeless. As such the creation of such housing is a priority in our Consolidated Plan and the HOME application review. If you would like further information on how to use HOME funds to assist the homeless please refer to CPD Notice 03-08 http://www.hud.gov/offices/cpd/affordablehousing/lawsandregs/notices/index.cfm.
Fair Housing & Equal Opportunity
All HOME program participants must comply with all state and federal laws and regulations regarding fair housing and equal opportunity. No person in the United States shall on the grounds of race, color, national origin, religion, sex be excluded, or sexual orientation denied benefits or subjected to discrimination under any program funded in whole or in part by HOME funds. To the greatest extent feasible, opportunities for training and employment arising from the HOME Program will be provided to low-income persons residing in the program service area. To the greatest extent feasible, contracts for work to be performed in connection with the HOME Program will be awarded to businesses which are located in or owned by persons residing in the County. However, projects must follow federal procurement requirements. Applicants must also outreach to the County’s MBE/WBE list when securing bids for work to be paid for by the County. Documentation of this outreach must be submitted to the County. Please contact Frances Thompson at 201-395-6267 for more information.
Accessibility
HOME projects must comply with Section 504 of the Rehabilitation Act of 1973 which prohibits discrimination in federally assisted programs on the basis of handicap. Depending on the type of rehabilitation and the number of units, a percentage of the units in a project must be handicapped accessible. The NJ State Building Code may require a higher percentage than Section 504.
Environmental Record Review
In accordance with regulations for federal funding, the County must conduct an environmental review on every project. The environmental review extends well beyond a typical Phase I Environmental Site Assessment and may require consultation with other governmental entities. It is the responsibility of the owner to ensure that the County has all the information necessary to complete the review. Depending on the type of project and where it is located, the Environmental Review process may take 4-6 months to complete. Under no circumstances can the Project begin and funds may not be expended until the review is completed and funds are authorized to be released by HUD.
Eligible Municipalities
HOME funds may be used in all Hudson County its Urban County Consortium municipalities. This includes all Hudson County municipalities except the City of Jersey City which has its own HOME allocation and may only be funded by the Hudson County Consortium in specific instances. In order for the Division to fund projects in the City of Jersey City, the applicant must first have a documented commitment from Jersey City and units developed must be for populations that are consistent with the County’s priorities such as homeless individuals/families or other supportive housing.
Eligible Properties
One or more buildings on a single site that are under common ownership, management, and financing. Buildings scattered on more than one site as long as the sites are under common ownership, management, and financing, and received HOME assistance as part of a single undertaking on the same construction schedule.
Single Room Occupancy (SRO)/Group Housing-Permanent SRO’s and group housing are eligible under the HOME Program, although they will not receive priority consideration. SROs must generally comply with the rental housing guidelines. Specific guidance is available through CPD Notice 94-01 *Using HOME funds for Single Room Occupancy (SRO) and Group Housing” available from the County. Please request this notice if you are applying for such a project.
Mixed-Income/ Mixed-Use Projects-Mixed-income and mixed-use (i.e. residential and commercial) are eligible for HOME funds in the affordable portions of the building. However, project costs must be allocated on a rational, documented basis in accordance with the actual unit-by-unit expenditures; or prorating of expenditures reflecting the proportion of HOME units in the project; or a combination of both. In a mixed-income project, designated HOME-assisted units may be fixed or floating units as long as the total number of affordable units remains the same and are comparable in size, features, and number of bedrooms.
Low Income Housing Tax Credits-LIHTC and HOME funds may be used together and for the most part the rules are compatible. The general rule is that when Tax Credit and HOME rules conflict Tax Credit rules are to be followed. Any project receiving Tax Credit and HOME funds requires a layering review to ensure that the project is not receiving an excess amount of subsidy.
Homeownership Projects-Single Family, Two-Family, Condominium, and Co-Ops are eligible homeownership unit types for Very Low and Low Income Households earning below 80% Area Median Income. The County will determine the affordable sales price at the outset of the project by undertaking an underwriting analysis based on current 30 year mortgage rates, estimated property taxes, insurance costs, rental income for two-family homes, and owner utilities. Affordability restrictions will be secured by a Deed Restriction, HOME Mortgage & Noteexecuted by the homeowner. Rental units in a two-family home will be restricted to High HOME rent limits and subject to monitoring by the County during the affordability period.
Ineligible properties include projects assisted under title VI of NAHA- Prepayment of Mortgages Insured under the National Housing Act; Public Housing projects; Rental Rehabilitation Program funded projects; properties with existing obligations to any federal, state, or local housing program.
Unit Mix, Rent Limits & Utility Allowances
For projects with five or more HOME units, 20% of the HOME assisted units must be set aside for Very Low Income households earning at or below 50% Area Median Income; the remaining HOME assisted units must be set aside for households earning at or below 60% Area Median Income. If the resulting number of units is a partial number, the result will be rounded up to the next whole number in order to satisfy the requirement. All HOME assisted unit rents may not exceed the current Low or High HOME Rent Limit as issued annually by HUD. Additionally, a Utility Allowance will be calculated and updated annually by the County and applied as a credit against the monthly rent for any tenant paid utilities.
HOME Program Guidelines & Reference Material
HOME Final Rule24 CFR Subpart E HOME Program Requirements24 CFR Subpart F HOME Project Requirements24 CFR Subpart G HOME CHDO Requirements24 CFR Subpart H HOME Other Federal Requirements2021 Hudson County HOME Program Income Limits2021 Hudson County HOME Program Rent Limits2021 Hudson County HOME Program Utility Allowances 2-4 Units2021 Hudson County HOME Program Utility Allowances 5+ Units
HOME Investment Partnerships Program
This Program is NOT For Tenant Rental/Utility Assistance!!
Overview
The HOME Investment Partnership Program (HOME) is designed to assist communities- often in partnership with local, not-for-profits, individuals, corporations, and public entities- to fund a wide range of affordable housing projects. These projects may include acquisition, rehabilitation, or new construction of affordable housing units for rental or homeownership. Affordable rental housing units created serve Extremely Low (below 50% AMI) and Very Low Income households (51-60% AMI) and affordable homeownership units created serve Very Low and Low Income households (below 80% AMI) based upon the current year Jersey City, NJ HUD Metro FMR Area Income Limits Summary.
Eligible Activities
Although various types of activities are eligible under the federal HOME Investment Partnership Program (HOME) regulations, applications for funds must be in conformance with the housing priorities in the County's submitted 2015-2019 Consolidated Plan. These priorities include: 1. Supporting the creation of new rental units through new construction or rehabilitation. Within this priority, there is also a focus on creating housing for individuals and families (under 55) and permanent housing for homeless individuals and families. 2. Priority will be given to any project that is consistent with County initiatives, including but not limited to: ending homelessness, housing for the very-low income, and redevelopment of foreclosed and/or abandoned properties.
Terms of Financing & Underwriting
The County's approach to providing HOME funds is to provide the "gap" financing necessary to make the project affordable under the HOME rental/purchase and income guidelines. The focus of this type of underwriting is to maximize the leveraging of private financing and minimize HOME funds. Detailed underwriting standard for rental housing projects are noted under the rental housing section of these guidelines. The County will consider providing HOME funds in the following manners: interest bearing loans, non-interest bearing loans, deferred loans (forgivable or repayable). Applicants may propose any of the forms listed above. However, loan proposals receive a higher priority.
It is also the position of the county to give higher priority to projects which request HOME funds as loans in order to replenish subsidy funds in order to fund future projects. All rental projects will be underwritten assuming a 30-year mortgage, at a current rate (determined by the County), with a 1.15 debt coverage ratio for the private financing. All income available at a 1.15 ratio must be used for private financing. Projects must maintain positive cash flow for the duration of the affordability period.
Guarantee
The County reserves the right to request a letter of credit, or other liquid security acceptable to the County, to ensure successful completion of the project. The amount of the letter of credit will be determined by the County. This letter of credit is particularly important when an owner is acting as a general contractor. In such a case the County will request a letter of credit in an amount equal to the difference between the contractor's cost and the County's cost to hire a general contractor through a public bidding process. Letters of credit must be irrevocable, non-documentary, issued by a reputable bank approved by the County and in a form acceptable to the County. Other forms of security will be subject to County approval.
Other Funding
HOME funds are not intended to be the sole source of project funding. Applicants are encouraged to seek out other sources of funds including but not limited to traditional lender financing, community development financial institution funding, Federal Home Loan Bank Affordable Housing Program funds, New Jersey Housing & Mortgage Finance Agency funding, local housing trust funds, private grants, etc. Projects where such funding is committed will receive a higher priority than projects that do not have committed funding. Disbursement of HOME Funds All owner equity must be invested in the project prior to the release of any County funds. The County will hold a retainage appropriate to the scope of the project until all required closeout documentation and initial occupancy data is provided.
Ineligible Projects
Projects that can be support adequate debt financing to complete the project or cannot demonstrate a need for HOME funds are ineligible. The minimum HOME subsidy per unit is $1,000. The maximum HOME subsidy per unit may not exceed 240% of the Sec. 234 Limit based on building type and unit size. Please see the Library Tab for further information.
Building Codes & Standards
All current State & Local Building Codes must be met at the completion of the project and in compliance with the federal Housing Quality Standards. All new construction and gut rehabilitation shall be designed to meet the Energy Subcode as set forth at N.J.A.C. 5:23-3.1. Projects are encouraged to be rehabilitated/constructed and certified to Energy Star, Enterprise Green Communities, LEED, or similar standard that incorporates whole house energy efficiency, water efficiency, and/or green materials. Rental housing property owners must maintain these housing standards for the duration of the regulatory period. Periodic inspections will be conducted by the County to ensure units are maintained and provide a safe, healthy living environment. Site and Neighborhood Standards Housing provided through the HOME Program must promote greater choice of housing opportunities. Neighborhood amenities such as access to transportation, healthcare facilities, supportive services, targeted development areas, environmentally safe areas, and access to grocery stores and banking will be considered. The County reserves to reject an application if it deems the site to be unacceptable.
Permanent Homeless Housing
The Hudson County Alliance to End Homeless, the local administrator of the Continuum of Care, operates under Coordinated Assessment. All supportive housing for the homeless constructed with Hudson County HOME funds must lease these units through the Coordinated Assessment process. Please see the Coordinated Assessment Policies under the Library Tab. The U.S. Department of Housing and Urban Development is encouraging municipalities to use resources such as the HOME Program to assist in the creation of permanent housing for the homeless with a focus on the chronically homeless. As such the creation of such housing is a priority in our Consolidated Plan and the HOME application review. If you would like further information on how to use HOME funds to assist the homeless please refer to CPD Notice 03-08 http://www.hud.gov/offices/cpd/affordablehousing/lawsandregs/notices/index.cfm.
Fair Housing & Equal Opportunity
All HOME program participants must comply with all state and federal laws and regulations regarding fair housing and equal opportunity. No person in the United States shall on the grounds of race, color, national origin, religion, sex be excluded, or sexual orientation denied benefits or subjected to discrimination under any program funded in whole or in part by HOME funds. To the greatest extent feasible, opportunities for training and employment arising from the HOME Program will be provided to low-income persons residing in the program service area. To the greatest extent feasible, contracts for work to be performed in connection with the HOME Program will be awarded to businesses which are located in or owned by persons residing in the County. However, projects must follow federal procurement requirements. Applicants must also outreach to the County’s MBE/WBE list when securing bids for work to be paid for by the County. Documentation of this outreach must be submitted to the County. Please contact Frances Thompson at 201-395-6267 for more information.
Accessibility
HOME projects must comply with Section 504 of the Rehabilitation Act of 1973 which prohibits discrimination in federally assisted programs on the basis of handicap. Depending on the type of rehabilitation and the number of units, a percentage of the units in a project must be handicapped accessible. The NJ State Building Code may require a higher percentage than Section 504.
Environmental Record Review
In accordance with regulations for federal funding, the County must conduct an environmental review on every project. The environmental review extends well beyond a typical Phase I Environmental Site Assessment and may require consultation with other governmental entities. It is the responsibility of the owner to ensure that the County has all the information necessary to complete the review. Depending on the type of project and where it is located, the Environmental Review process may take 4-6 months to complete. Under no circumstances can the Project begin and funds may not be expended until the review is completed and funds are authorized to be released by HUD.
Eligible Municipalities
HOME funds may be used in all Hudson County its Urban County Consortium municipalities. This includes all Hudson County municipalities except the City of Jersey City which has its own HOME allocation and may only be funded by the Hudson County Consortium in specific instances. In order for the Division to fund projects in the City of Jersey City, the applicant must first have a documented commitment from Jersey City and units developed must be for populations that are consistent with the County’s priorities such as homeless individuals/families or other supportive housing.
Eligible Properties
One or more buildings on a single site that are under common ownership, management, and financing. Buildings scattered on more than one site as long as the sites are under common ownership, management, and financing, and received HOME assistance as part of a single undertaking on the same construction schedule.
Single Room Occupancy (SRO)/Group Housing-Permanent SRO’s and group housing are eligible under the HOME Program, although they will not receive priority consideration. SROs must generally comply with the rental housing guidelines. Specific guidance is available through CPD Notice 94-01 *Using HOME funds for Single Room Occupancy (SRO) and Group Housing” available from the County. Please request this notice if you are applying for such a project.
Mixed-Income/ Mixed-Use Projects-Mixed-income and mixed-use (i.e. residential and commercial) are eligible for HOME funds in the affordable portions of the building. However, project costs must be allocated on a rational, documented basis in accordance with the actual unit-by-unit expenditures; or prorating of expenditures reflecting the proportion of HOME units in the project; or a combination of both. In a mixed-income project, designated HOME-assisted units may be fixed or floating units as long as the total number of affordable units remains the same and are comparable in size, features, and number of bedrooms.
Low Income Housing Tax Credits-LIHTC and HOME funds may be used together and for the most part the rules are compatible. The general rule is that when Tax Credit and HOME rules conflict Tax Credit rules are to be followed. Any project receiving Tax Credit and HOME funds requires a layering review to ensure that the project is not receiving an excess amount of subsidy.
Homeownership Projects-Single Family, Two-Family, Condominium, and Co-Ops are eligible homeownership unit types for Very Low and Low Income Households earning below 80% Area Median Income. The County will determine the affordable sales price at the outset of the project by undertaking an underwriting analysis based on current 30 year mortgage rates, estimated property taxes, insurance costs, rental income for two-family homes, and owner utilities. Affordability restrictions will be secured by a Deed Restriction, HOME Mortgage & Noteexecuted by the homeowner. Rental units in a two-family home will be restricted to High HOME rent limits and subject to monitoring by the County during the affordability period.
Ineligible properties include projects assisted under title VI of NAHA- Prepayment of Mortgages Insured under the National Housing Act; Public Housing projects; Rental Rehabilitation Program funded projects; properties with existing obligations to any federal, state, or local housing program.
Unit Mix, Rent Limits & Utility Allowances
For projects with five or more HOME units, 20% of the HOME assisted units must be set aside for Very Low Income households earning at or below 50% Area Median Income; the remaining HOME assisted units must be set aside for households earning at or below 60% Area Median Income. If the resulting number of units is a partial number, the result will be rounded up to the next whole number in order to satisfy the requirement. All HOME assisted unit rents may not exceed the current Low or High HOME Rent Limit as issued annually by HUD. Additionally, a Utility Allowance will be calculated and updated annually by the County and applied as a credit against the monthly rent for any tenant paid utilities.
HOME Program Guidelines & Reference Material
HOME Final Rule24 CFR Subpart E HOME Program Requirements24 CFR Subpart F HOME Project Requirements24 CFR Subpart G HOME CHDO Requirements24 CFR Subpart H HOME Other Federal Requirements2021 Hudson County HOME Program Income Limits2021 Hudson County HOME Program Rent Limits2021 Hudson County HOME Program Utility Allowances 2-4 Units2021 Hudson County HOME Program Utility Allowances 5+ Units