HUD Issues HOME-ARP Guidance for Assisting Households Experiencing or at Risk of Homelessness
Today, the Department of Housing and Urban Development (HUD) published Notice CPD-21-10 establishing the requirements for the $5 billion provided under the American Rescue Plan Act through the HOME program (HOME-ARP) intended for use by HOME participating jurisdictions (PJs) to provide housing and services primarily for households experiencing or at risk of homelessness. HOME-ARP may be used to develop affordable housing, for tenant-based rental assistance (TBRA), to provide supportive services, and for the acquisition and development of non-congregate shelter units. The notice describes the requirements applicable to PJs’ use of HOME-ARP funds, including Consolidated Plan requirements and HOME program regulations. HUD also published an appendix describing the waivers and alternative requirements imposed on PJs for the use of HOME-ARP. The notice is effective immediately.
Under the guidance, 100 percent of HOME-ARP dollars used for TBRA, supportive services, and acquisition and development of non-congregate shelter units must benefit individuals and families in qualifying populations, which include those who are homeless; at risk of homelessness; fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking, or human trafficking; and other households requiring services or housing assistance to prevent homelessness but do not otherwise qualify under the other categories. However, only 70 percent of affordable rental housing units acquired, rehabilitated, or constructed with HOME-ARP funds must be occupied by qualifying populations, with the remainder available to low-income households more generally. This flexibility is intended to help properties remain financially feasible.
HUD recognizes the challenges of developing financially feasible rental housing for HOME-ARP-eligible populations unless the property has project-based rental assistance. In a major victory for NCSHA, HUD is permitting PJs to use HOME-ARP funds to provide ongoing operating cost assistance or to capitalize a project operating cost assistance reserve to address operating deficits of the HOME-ARP-restricted units for qualifying populations. NCSHA had been strongly advocating that HUD allow this use of funds. The notice also suspends the maximum per-unit subsidy limit for HOME-ARP units to enable HOME-ARP to be used to pay the entire cost to acquire, rehabilitate, and/or construct the HOME-ARP rental units, thus eliminating the need for HOME-ARP units to support debt.
HUD also is allowing the use of master leases, under which a lease may be executed between the project owner and a HOME-ARP sponsor organization, which would then sublease units to qualifying households. The HOME-ARP sponsor in this instance is a nonprofit organization that provides housing or supportive services to qualifying households. NCSHA had also advocated for this provision.
Each PJ must develop a HOME-ARP allocation plan, including engaging in public participation and consultation, and submit it as an amendment to its Fiscal Year (FY) 2021 annual action plan. The allocation plan must describe how the PJ intends to distribute HOME-ARP funds and address the needs of HOME-ARP qualifying populations. PJs must consult with agencies and service providers whose clientele include HOME-ARP qualifying populations, including Continuums of Care serving a jurisdiction’s geographic area, homeless and domestic violence service providers, veterans’ groups, public housing agencies, and organizations that address fair housing, civil rights, and the needs of persons with disabilities, in developing their plans.
The guidance waives the HOME Community Housing Development Organization (CHDO) set-aside, match requirement, and 24-month commitment deadline. It also allows PJs to devote up to 15 percent of their total grant to administrative costs. Moreover, PJs may provide up to five percent of their grant for operating assistance to nonprofits, which do not need to be designated as CHDOs.
HUD also has released HOME-ARP implementation fact sheets.
