| (a) Eligible Activities must meet the ownership requirement
in paragraph (1) of this subsection and an Activity described in paragraph
(2) of this subsection:
(1) Ownership requirement. A site must be owned by
the beneficiary or the HOME Activity must include one of the two following
Activities:
(A) Acquisition of existing single family housing or
a parcel; or
(B) Refinance of non-owner occupied real property parcel
not prohibited for single family housing by zoning or restrictive
covenants.
(2) All Activities must include New Construction of
a unit of single family housing not occupied by the Household prior
to assistance; New Construction described in this subsection includes
the purchase and installation of a new unit of Manufactured Housing
(MHU).
(b) The unit of housing in any of the Activities described
in subsection (a) of this section must be occupied by the assisted
Household as their principal residence for a minimum of 15 years from
the Construction Completion Date.
(c) If the assisted property is owned by the Household
prior to participation, the Household must be current on any existing
Mortgage Loans and taxes, and the property cannot have any existing
home equity loan liens. HOME funds may not be utilized to refinance
loans made or insured by any federal program.
(d) The purchase price of acquired property and the
post-improvement value of the unit may not exceed the limitations
set forth in 24 CFR §92.254. Compliance with the purchase price
limitation must be evidenced prior to loan closing. Compliance with
the post-improvement value limitation must be evidenced with a final
appraisal of the completed project prior to release of retainage.
(e) Activity Costs. Total Activity Costs, exclusive
of Match funds, are limited to an amount not to exceed the federal
subsidy limitations defined in 24 CFR §92.250. Direct Activity
Costs, exclusive of Match and leverage, for construction are limited
to:
(1) Construction of new site-built housing: The Direct
Activity Costs are not restricted beyond the Total Activity Costs
as identified in this subsection; and
(2) Placement of an energy efficient MHU: $90,000.
(f) In addition to the Direct Activity Costs allowable
under subsection (e) of this section, a sum not to exceed $15,000
and not causing the total subsidy to exceed the limitations set forth
by 24 CFR §92.250 may be requested and, if approved, used to
pay for any or all of the following, as applicable:
(1) Necessary environmental mitigation as identified
during the Environmental review process;
(2) Installation of an aerobic septic system; and
(3) Homebuyer requests for accessibility features.
(g) Activity soft costs eligible for reimbursement
are limited to:
(1) New Construction of site-built housing: no more
than $13,500 per housing unit; or
(2) Replacement with an MHU: no more than $5,000 per
housing unit.
(h) Funds for administrative costs are limited to no
more than eight percent of the Direct Activity Costs, exclusive of
Match funds.
(i) Homebuyers may choose to obtain financing for the
acquisition or construction, or any combination thereof, from a third-party
lender so long as the loan meets the requirements of Section 20.13
of this Title (relating to Loan, Lien and Mortgage Requirements for
Activities).
(j) Direct assistance will be structured as a fully
amortizing, repayable loan and will initially be evaluated at zero
percent interest. The minimum loan term shall be equal to the required
federal affordability period based on the HOME investment, and shall
be calculated by setting the total estimated housing payment (including
principal, interest, property taxes, insurance, and any other homebuyer
assistance), equal to at least the minimum required housing payment.
Should the estimated housing payment, including all funding sources,
be less than the minimum required housing payment for the minimum
term, the Department may charge an interest rate to the homebuyer
such that the total estimated housing payment is no less than the
required minimum housing payment. In no instance shall the interest
rate charged to the homebuyer exceed five percent and such result
may deem the applicant as overqualified for assistance. The term shall
not exceed 30 years and not be less than 15 years.
(1) The total Mortgage Loan may include costs incurred
for Acquisition or Refinance, Mortgage Loan closing costs, and Direct
Activity Costs, exclusive of Match funds.
(2) The total Debt-to-Income Ratio shall not exceed
the limitations set forth in Chapter 20 of this Title.
(3) For buyers whose income is equal to or less than
50 percent AMFI, the minimum required housing payment shall be no
less than 15 percent of the household's gross income. For homebuyers
whose income exceeds 50 percent AMFI, the minimum required housing
payment shall be no less than 20 percent of the household's gross
income.
(k) Earnest money may be credited to the homebuyer
at closing, but may not be reimbursed as cash. HOME funds may be used
to pay other reasonable and customary closing costs that are HOME
eligible costs.
(l) To ensure affordability, the Department will impose
recapture provisions established in this Chapter.
(m) For New Construction, site-built housing units
must meet or exceed the 2000 International Residential Code and all
applicable local codes, standards, ordinances, and zoning requirements.
In addition, New Construction housing is required to meet 24 CFR §92.251(a)(2)
as applicable. MHUs must be installed according to the manufacturer's
instructions and in accordance with Federal and State laws and regulations.
(n) Housing proposed to be constructed under this subchapter
must meet the requirements of Chapters 20 and 21 of this Title (relating
to Single Family Programs Umbrella Rule and Minimum Energy Efficiency
Requirements for Single Family Construction Activities, respectively)
and must be certified by a licensed architect or engineer.
(1) To the extent that a set of architectural plans
are generated and used by an Applicant for more than one home site,
the Department will reimburse only for the first time a set of architectural
plans is used, unless any subsequent site specific fees are paid to
a Third Party architect, or a licensed engineer for the reuse of the
plans on that subsequent specific site.
(2) A NOFA may include incentives or otherwise require
architectural plans to incorporate "green building" elements.
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