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Affordable Housing Programs

Office of Affordable Housing Programs (OAHP) administers three separate programs designed to address the nationwide shortage in affordable housing. The HOME Investment Partnerships, Self-Help Homeownership (SHOP), and Homeownership Zone programs bring federal resources directly to the state and local level for use in the development of affordable housing units, or to assist income-eligible households in purchasing, rehabilitating, or renting safe and decent housing.

The expansion of the supply of affordable housing for low-income families is at the very core of HUD's mission. The Office of Community Planning and Development, the Office of Housing, and the Office of Public and Indian Housing all administer programs designed to increase the stock of housing affordable to low-income households.

HOME Program
American Dream Downpayment Initiative
Self-Help Homeownership Opportunity Program (SHOP)
Homeownership Zones

HOME Program

Summary
Congress created the HOME Investment Partnerships Program in 1990. The HOME program is a formula grant of federal housing funds to states and local jurisdictions. Local jurisdictions are larger cities and consortia of smaller communities (called “Participating Jurisdictions,” or PJs).

A Community Housing Development Organization (CHDO) is a community-based, nonprofit organization that has obtained or intends to obtain staff with the capacity to develop affordable housing for the community it serves. PJs are required to set aside a minimum of 15% of their annual HOME allocation for housing development activities in which qualified CHDOs are the owners, developers, and/or sponsors of the housing.

Type of Assistance
Assistance can be in the form of a grant, loan, interest subsidies, equity investments or loan guarantees. The local PJ determines the type of assistance.

Eligible Activities
HOME funds can be used for the following uses:

• Rental housing production, acquisition, and rehabilitation loans and grants;
• First-time homebuyer assistance;
• Rehabilitation loans for homeowners; and
• Tenant-based rental assistance (2 year renewable contracts).

15 percent of a state or local jurisdictions HOME funds must be set-aside for use by certified Community Housing Development Organizations.

Eligible Applicants
States are automatically eligible for HOME funds and receive either their formula allocation or $3 million, whichever is greater. Local jurisdictions eligible for at least $500,000 under the formula ($335,000 in years when Congress appropriates less than $1.5 billion for HOME) also can receive an allocation. Communities that do not qualify for an individual allocation under the formula can join with one or more neighboring localities in a legally binding consortium whose members' combined allocation would meet the threshold for direct funding. Other localities may participate in HOME by applying for program funds made available by their State. Congress sets aside a pool of funding, equivalent to the greater of $750,000 or 0.2 percent of appropriated funds, which HUD distributes among insular areas.

Contact the City of Boise or Idaho Housing & Finance Association for eligible sub recipients (please see contact information below).

AMI Requirements
All housing developed with HOME funds must serve low (≤80% AMI) and very low (≤50%) income individuals and families. For rental housing, at least 90 percent of HOME funds must benefit families whose incomes are ≤60% AMI; the remaining 10 percent must benefit families whose incomes are ≤80% AMI of area median income.

HUD http://www.hud.gov/offices/cpd/affordablehousing/programs/home/

Please see Additional Resources section under the Contacts, Links, Information and Resources division at the end of this Guide for more resources on the HOME program.

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American Dream Downpayment Initiative

Summary
American Dream Downpayment Initiative (ADDI) was authorized to increase the homeownership rate, especially among lower income and minority households, and to revitalize and stabilize communities. ADDI is administered as a part of the HOME Investment Partnerships Program.

Type of Assistance
ADDI provides funds for downpayment, closing costs, and rehabilitation carried out in conjunction with the assisted home purchase. The amount of ADDI assistance provided may not exceed $10,000 or six percent of the purchase price of the home, whichever is greater. The rehabilitation must be completed within one year of the home purchase. Rehabilitation may include, but is not limited to, the reduction of lead paint hazards and the remediation of other home health hazards.

Eligible Applicants
To be eligible for ADDI assistance, individuals must be first-time homebuyers interested in purchasing single family housing. A first-time homebuyer is defined as an individual and his or her spouse who have not owned a home during the three-year period prior to the purchase of a home with ADDI assistance. ADDI funds may be used to purchase one- to four- family housing, condominium unit, cooperative unit, or manufactured housing.

AMI Requirements
A person must demonstrate the low income (≤80% AMI) status for the eligible person and their family.

Contact Information
HUD http://www.hud.gov/offices/cpd/affordablehousing/programs/home/addi/

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Self-Help Homeownership Opportunity Program (SHOP)

Summary
Self-help Homeownership Opportunity Program (SHOP) provides funds for eligible non-profit affordable housing development organizations to purchase home sites and develop or improve the infrastructure needed to set the stage for sweat equity and volunteer-based homeownership programs for low-income persons and families. SHOP funds are used for eligible expenses to develop decent, safe and sanitary non-luxury housing for low-income persons and families who otherwise would not become homeowners. Homebuyers must be willing to contribute significant amounts of their own sweat equity toward the construction of the housing units. SHOP funds are disbursed locally by Housing Assistance Council (HAC), a national intermediary, and by Community Frameworks, a regional non-profit intermediary serving Washington, Oregon, Idaho and Montana.
No separate program regulations exist for SHOP. All program requirements are listed annually in the SHOP NOFA.

Summary of Community Frameworks SHOP Awards

Type of Assistance
Community Frameworks' SHOP provides 10-year, zero-interest, 100%-forgivable loans to nonprofit organizations and public agencies sponsoring self-help homeownership projects. Funds recaptured upon “take-out” may be revolved back to the local organization for use in future self-help projects, or may be reconveyed to project homebuyers as second mortgages that increase the affordability of their homes. Eligible projects must have a substantial sweat equity and volunteer labor component. Current requirements are 100 hours for a 2-adult household and 50 hours for a 1-adult household, plus community participation in which volunteers assist in the construction or rehabilitation of dwellings. SHOP funds partner well with the USDA-RD Mutual Self-Help Program which requires a 65% labor contribution by home buyers.

In addition to SHOP funds, applicant organizations may also receive technical assistance in program and management development from Community Frameworks' SHOP staff. Small organizations working in very rural areas, organizations beginning their first self-help project, or organizations expanding into different areas such as urban self-help or self-help rehab programs can receive technical assistance and training to establish, strengthen or expand their programs.

Eligible Activities
SHOP funds may be used for only land acquisition and infrastructure improvements. Total land acquisition and infrastructure improvement costs together may not exceed an average of $15,000 in SHOP assistance per home.

Eligible Applicants
Eligible applicants are nonprofit affordable housing developers. Community Frameworks currently works with 42 local organization SHOP affiliates throughout the Northwest. Community Frameworks sponsors an annual meeting for its SHOP affiliates that provides training in various aspects of self-help housing development, and a venue for project sponsors to share information and engage in mutual capacity building. This meeting is also open to organizations interested in developing new self-help programs and becoming affiliates of Community Frameworks' SHOP program.

AMI Requirements
Households served by SHOP-funded programs must have incomes at ≤80% of AMI.

Contact Information
Christina Mejia
SHOP Program Manager
Community Frameworks
409 Pacific Avenue, Suite 303
Bremerton, WA 98337
(360) 377-7738, ext. 24
Email: christinam@communityframeworks.org
Website: http://www.communityframeworks.org

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Homeownership Zones

Summary
The Homeownership Zone initiative (HOZ) awarded grants to selected cities as seed money to stimulate investment in their target areas. Homeownership Zone cities were encouraged to apply New Urbanist design principals in developing their HOZ plans by providing for a pedestrian-friendly environment, a mix of incomes and compatible uses, defined neighborhood boundaries and access to jobs and mass transit. There have been two competitive funding rounds, one in federal fiscal year 1996 (FY 96) and one in federal fiscal year 1997 (FY 97). No additional grant funds are currently available.

Contact Information
For more information contact Ginger Macomber, Homeownership Zone Coordinator, at (202) 402-4605 or visit the program website at:
http://www.hud.gov/offices/cpd/affordablehousing/programs/hoz/
The website provides feedback and lessons learned from those communities which participated in this demonstration program.

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