How Public/Private Partnerships Increase the Stock of Affordable Housing

person A.J. Johnson today 04/14/2023

Some of the most successful affordable housing projects in the United States are the result of public/private partnerships. An integrated approach to affordable housing leads to the most thriving developments.

This "integrated approach" amplifies the connective role that housing plays in a community. Housing is a building block of a community’s infrastructure, a factor in public safety, a component of the healthcare continuum, a driver of employment, a solution to addressing climate change, and a bridge to economic mobility.

While affordable housing is generally defined as housing on which the occupant is paying no more than 30 percent of income for housing costs, such housing must also be decent, safe, and located in proximity to adequate employment and transportation options.

In addition to the major affordable housing programs (Section 42, Section 8, public housing), we should not overlook the Department of Housing & Urban Development (HUD) Community Planning & Development (CPD) programs, as well as state and local programs.

CPD programs form a strong secondary group of housing options for affordable housing developers and include:

  • Community Development Block Grant (CDBG): The CDBG program provides funding to states, cities, and counties, principally for low and moderate-income persons. Housing-related eligible activities include the acquisition of real property, clearance/demolition, infrastructure, rehabilitation, conversion, and in limited circumstances, new housing construction.
  • HOME Investment Partnerships (HOME): HOME is a flexible funding program designed specifically to meet the affordable housing needs of low-income renters and homebuyers/owners. Eligible activities include costs associated with housing acquisition, new construction, and rehabilitation as well as tenant-based rental assistance. HOME funds are often used in conjunction with the Low-Income Housing Tax Credit (LIHTC) Program,
  • Housing Trust Fund (HTF): The HTF program provides grants to states to develop and preserve affordable housing - primarily rental housing for extremely low-income households. Eligible activities include housing acquisition, new construction, and rehabilitation, along with operating subsidies to ensure the long-term financial stability of assisted projects.
  • Section 108 Loan Guarantee (Section 108): This program enables CDBG grantees to leverage the annual CDBG grant and can be used for a number of housing activities, including housing rehabilitation, acquisition, site preparation, and, under limited circumstances, new construction.

How Can These Funds Be Accessed?

With the exception of Section 108 funds, annual CPD programs provide grants on a formula basis to qualifying jurisdictions. Private owners and landlords have no access to these funds - except through the qualifying jurisdictions.

State and local governments must develop and submit a Consolidated Plan every three to five years. As part of this plan, jurisdictions are required to (1) conduct an evaluation of its housing market and needs; (2) identify public policies at the local jurisdiction level that serve as barriers to affordable housing and identify the strategy to remove or ease the negative impact of such policies; and (3) comply with the affirmatively furthering fair housing mandate that sets out a framework for CPD grantees to take meaningful actions to overcome historic patterns of segregation.

Partnerships in CPD-Funded Housing Development

Annual CPD programs often serve as key components in development deals; for example, gap financing, commitment letters to secure private financing, or "last-in" dollars to finalize deal closings.

The key role of local government is to foster cooperation between public agencies and the private sector. To effectively layer the multiple funding sources often required in affordable housing developments, local administrators must understand the regulatory, eligibility, and reporting requirements of each source, as well as their operational limits. Unfortunately, many local officials do not possess this level of understanding and it falls on private sector actors to educate the locality about how the programs can work together.

Following is a discussion of some of the financing tools that can be funded through the annual CPD programs.

Bridge Loans (CDBG, HOME, HTF, §108)

Certain private funders (e.g., LIHTC investors) may be able to offer better terms if their contribution to a project is delayed significantly (the "time/value" of money). By offering low-cost "bridge" loans, government agencies can help developers access these improved terms by covering development costs during the delay period.

Bridge loans are CPD eligible but uncommon given the lengthy affordability restrictions associated with HOME and HTF, in particular.

Capital Subsidies (CDBG, HOME, HTF, §108)

Capital subsidies refer to grants and long-term forgivable or low-cost/cash flow loans that may be used as permanent sources in a development project. By reducing the amount of conventional financing required by a project, these subsidies can reduce project costs beyond the actual dollar amount contributed to the project. CPD funds may also be used to refinance existing mortgages in order to reduce interest payments in existing developments.

For LIHTC developments, federal grants may cause a reduction in the project’s eligible basis, which can result in a decrease in overall funding available for the project. For this reason, many communities provide federal subsidies to LIHTC projects in the form of low-cost loans - which are includable in eligible basis.

Operating Subsidies (HTF)

For projects that serve the lowest-income households, where rents are insufficient to cover operating expenses and debt service, government-provided operating subsidies can boost that revenue, thus increasing the project’s ability to leverage conventional financing. This may take the form of annual payments to affordable housing owners for the ongoing operation of a housing development serving extremely low-income households. The concept is similar to the public housing operating subsidy program.

Property Acquisition & Pre-Development Loans (CDBG, HOME, HTF, §108)**

These loans subsidize upfront costs. They work by providing low-cost or deferred payment loans for developers to cover early development costs before other long-term funding is available.

**Pre-development loans are not an eligible use for any of the CPD programs except for HOME Community Housing Development Organization (CHDO) funding. Such funding is not available for private developers or public agencies.

Rental Assistance (HOME)

Rental assistance makes units more affordable to a wider group of households, thus contributing to higher occupancy levels and faster lease-up; it may improve the reliability of rental payments; and in instances where the subsidized rent payment is higher than what the unit would generate without the subsidy, it increases rental revenue for the property.

Both project- and tenant-based rental assistance programs, such as Housing Choice Vouchers, are available through HUD’s Office of Public and Indian Housing and can complement CPD-funded assistance.

Although project-based rental assistance is not CPD-eligible, tenant-based assistance is HOME eligible.

Revolving Loans (CDBG, HOME, HTF, §108)

Revolving loans are repayable low-interest loans made to private developers. Repaid funds are then used to create a revolving loan fund that can be committed to different projects or developers. Revolving loans only require a government’s initial investment to be established, after which they become self-sustaining. Since they are not forgivable loans, they tend to give developers limited flexibility when used as pre-development funding.


Complex financing is typical in affordable housing deals. Successful developments often leverage annual CPD funds with other public and private sources.

Here are some of the most commonly used sources for development that may be paired with CPD funding:

Federal Home Loan Bank (FHLB) Affordable Housing Program (AHP)

The AHP is a competitive funding program for the production and preservation of affordable housing (both rental and homeownership), funded by the government-sponsored FHLB system. AHP funds can be either grants or low-interest loans and are often combined with LIHTC proceeds. Awards are made directly to the development team and do not go through a local government. However, localities often assist in shaping the resulting projects by collaborating with developers early in the process.

Historic Tax Credits (HTC)

HTCs provide capital funds for developers undertaking a substantial rehabilitation of a historic asset. Funds can be used to rehab historic residential buildings or adaptive reuse of other historic structures.

Housing Finance Agency (HFA) Risk Sharing - Section 542(C)

This state-administered program provides low-cost capital to spur the development of rental housing through risk-sharing arrangements between HUD and HFAs.

Investment Tax Credits (ITCs) and Other Energy Efficiency Funding

These are commonly referred to as "solar tax credits." ITCs and other funding mechanisms such as utility rebates, energy performance contracts, and Property Assessed Clean Energy (PACE) programs can be used as part of the funding stack for housing projects that commit to certain levels of energy efficiency and renewable energy generation. These financial incentives can provide a bonus benefit for LIHTC projects that are required to include energy conservation components by state allocation plans.

Low-Income Housing Tax Credit (LIHTC)

This is the big Kahuna of affordable rental housing programs. A huge percentage of affordable deals rely on the LIHTC as the lynchpin of feasibility. While the awards are made directly to developers, local governments often work with and lend their support to local developers to help shape the proposed project and make the applications more competitive.

New Markets Tax Credits (NMTCs)

Local organizations called Community Development Entities (CDEs) apply for NMTCs from the Community Development Financial Institution (CDFI) fund and invest the proceeds into public interest projects (including affordable housing construction) in qualified low-income communities.

Opportunity Zones (OZs)

OZs offer a tax incentive for people and corporations to invest in distressed communities across the country. Affordable housing development may be structured in a way to leverage these incentives when proposing housing in an OZ.

Tax-Exempt Bonds

These bonds are issued by state or local government agencies, often in conjunction with an award of low-income housing tax credits. Tax-exempt bonds function like loans that are contracted by governments and then passed along to developers. With tax-exempt bonds, the investor who purchases the loan is exempt from federal income taxes on the interest earned from that loan. This results in higher returns for the investor when compared to many taxable bonds. The terms of the loan for tax-exempt bonds are typically more favorable to the borrower than the terms of taxable loans. This is basically a low-interest mortgage loan, which results in the potential lowering of rents since debt service is less.

Developing Creative Affordable Housing Models

In addition to the traditional housing development models noted above, a creative approach to funding strategies and a broad perspective on how that funding may be obtained is required. Following are some potential affordable housing models that both developers and localities should consider as they move forward with the creation of new ways to develop this much-needed resource.

Community Land Trusts (CLTs)

A CLT is an affordable homeownership or rental housing model in which a single entity, typically a non-profit or quasi-governmental organization (such as a PHA) maintains ownership of the land when a household (or developer) purchases that home that is on the land. The developer or homeowner pays a nominal amount to the CLT on a monthly or annual basis to lease the land. Long-term affordability is created by removing the cost of the land from the value of the development and by entering into long-term agreements that require the maintenance of affordability. Funding sources for the establishment of CLTs include CDBG, HOME, and HTF.

Employer-Assisted Housing (EAH) Programs

Development of EAH projects typically involve the subsidy of housing costs for employees who live in proximity to the workplace. Government agencies may offer incentives, such as dollar-for-dollar match of funds, encouraging the implementation of such programs, and maximizing the impact of the programs.

Land Banks

Land banks are quasi-public entities that acquire, manage, repurpose, and sell vacant or abandoned real estate. While not a financial mechanism in the strict sense, land banking can translate into significantly less expensive development of housing due to lower acquisition costs. For example, in Richmond, VA, the Richmond Land Bank (a program of the Maggie Walker Community Land Trust) receives vacant or tax-delinquent property from the City of Richmond and then transfers those properties to affordable housing developers. Similar land banks can be found across the United States.

Social Impact Bonds

This is a public-private partnership in which a government entity issues bonds that are purchased by investors. The funds provided by the investors are for projects that are expected to have a positive social impact and are repaid by the government when that impact is achieved. These bonds are often used for new or rehabbed affordable housing and supportive housing units. This type of partnership will often include metrics that go beyond the delivery of physical units, such as populations to be served, specific communities to be invested in, and employment opportunities generated.

Project Profiles

The following project profiles demonstrate how communities layer various funding sources, including CPD programs, and employ creative models into planning and developing their own affordable housing.

Avondale Trace           -           High Point, NC

  • The City of High Point used $650,000 of Section 108 funds as leverage to obtain $10.4 million in private capital in order to build this 72-unit affordable housing complex.
  • The use of the §108 funds enabled the city to preserve its HOME funds, which were originally used to secure the 9% LIHTC for the project.
  • §108 funding must follow similar rules to the CDBG program, which includes restrictions on the construction of new rental housing.
  • After paying for site acquisition and improvements using, in part, the Section 108 funds, the city conveyed the property to the owner of the project.
  • Other funding sources include -
    • NCHFA Rental Production Loan;
    • NCHFA Workforce Housing Loan; and
    • A conventional first mortgage loan.
  • Both the rental program loan and the §108 loan are structured as "soft debt" for the project.
  • The development includes a clubhouse, playground, and picnic area.
  • Residents earn between 40% and 60% of the area median income.

Erin Park       -           Eastpointe, MI

  • This project is an example of how deed-restricted homeownership provides an affordable housing option in an area of single-family homes and duplexes, where a multifamily structure would not have blended with the neighborhood.
  • To increase homeownership opportunities, a "lease-purchase" program has been implemented.
  • The project has 52 two- and three-bedroom units in one and two-story buildings.
  • 18 of the units have Project-Based Vouchers provided by the Michigan State Housing Development Authority. There are also eight Section 811 units.
  • The total development cost was $16 million with some of the gap financing provided by a $560,506 allocation of HOME funds.
  • Incomes range from 30% to 80% of AMGI, but most residents are below the 60% income level.
  • Residents enter into 15-year lease-to-purchase contracts. In year 13, the owner will begin discussions with residents giving them the option to purchase their units. At the end of the compliance period, residents will have the option to purchase the units at an affordable price.
  • Residents who do not wish to purchase may remain as renters and when they move out, the unit will be sold for affordable homeownership.

Brewster Woods at the Cape   -           Cape Cod, MA

The development is located on a formerly vacant lot in Cape Cod and is targeted at those who work in the community but cannot afford to live there, such as teachers, service workers, and healthcare workers. This is a common problem in resort communities.

  • The project will have seven project-based vouchers (there are 29 total units) to serve households below 30% of AMI in addition to three Section 811 supportive housing units.
  • With a total development cost of $12 million, multiple funding layers were required, including local, state, and federal funding.
    • A $1.68 million Massworks grant funded site clearing and infrastructure - roads, sidewalks, and utilities;
    • The local building fees were waived, and the permitting process, which is normally very difficult for multifamily housing, was expedited by the state, which allows for more flexible zoning rules;
    • $2.4 million loan from the Massachusetts Housing Partnership;
    • $1 million in Affordable Housing Trust Funds from MassHousing;
    • $450,000 loan from the Community Economic Development Assistance Corporation;
    • $550,000 in Brewster Community Preservation Act money; and
    • $800,000 in local and state HOME funding ($250,000 from the local HOME Consortium and $550,000 from the state’s Department of Housing & Community Development HOME funds.

Lincoln Place -           Rutland, VT

Lincoln Place is an example of increasing affordable housing supply through the development of public property. The development was originally a school, which was abandoned and deteriorating. This historic structure now provides 19 units of affordable housing. Historic tax credits were obtained, which enabled the developer (Housing Trust of Rutland) to preserve elements of the former school. The Rutland Housing Authority provides project-based vouchers and the development also used Housing Trust Fund money, HOME funds, and CDBG.

Westview Village        -           Ventura, CA

These 286 affordable units were developed with a mix of funding, including CDBG, and are part of a RAD conversion. The property serves seniors, individuals, and families, including "entry-level" households.

Westview Village replaced the city’s oldest public housing development which was built in the 1950s. It was co-developed by the Housing Authority of the City of San Buenaventura and BRIDGE Housing Corporation. 34 single family homes are provided for "entry-level" families that will be deed restricted. The old public housing project had 180 units, so this new deal actually adds 106 units to the affordable housing stock.

The RAD program guarantees a return to the property for those displaced by the construction. Of the resident households that were temporarily displaced, 79 have already opted to move back to the property once construction has been completed. The remaining households are either choosing to remain in the public housing complexes to which they were relocated, purchasing their own homes, or accepting tenant-based rental assistance.

The total development costs are estimated to be $192 million of which $960,111 are HOME funds and $5,335,055 in CDBG funds.

The Connection Between Affordable Housing & the Community

Affordable housing is not just bricks and sticks - it is the point at which all community sectors come together and the backbone of our neighborhoods. The development of affordable housing impacts every element of a community’s development, from infrastructure to economic mobility. Let’s review some of the key elements of any community development program and see how affordable housing impacts those elements.


Affordable housing contributes to communities in important ways, both as a physical asset and a form of economic activity. Affordable housing development is often accompanied by infrastructure improvements that affect the larger community in positive ways. Among these benefits are improving neighborhood walkability and accessibility by updating sidewalks and streetscapes, increasing the availability of green and open spaces, and bringing transportation hubs and economic investment to areas with traditionally low investment or declining neighborhoods. Environmental advocates, chambers of commerce, and transportation planners often support affordable housing development by understanding its value as a conduit for improved infrastructure.

Public Safety

A lack of decent, affordable housing can have wide-ranging impacts on the security of a community as a whole and the safety of its most vulnerable members. The availability of affordable housing may correlate to a reduction in crime. Eliminating barriers to housing for persons with correctional backgrounds can lead to reduced recidivism, which is why proper development of criminal screening procedures is so important. Housing chronically homeless individuals leads to reduced incarceration and reliance on emergency medical care, with substantial monetary savings to local taxpayers.


Housing has long been recognized as one of the social determinants of health and well-being. Housing stability and affordability, the quality of one’s home, and neighborhood characteristics such as walkability, safety, and environmental quality all impact the overall health of residents. When people have increased access to medical services, rather than having to rely on emergency room care as is often the case with people experiencing homelessness, healthcare costs decrease for both the individual and the healthcare system. It is becoming increasingly common for affordable housing developments, particularly for seniors and more vulnerable populations, to include a healthcare component such as a clinic.

Workforce Housing

Partnering with large neighborhood or area employers to develop workforce housing can be very successful if local employers are brought into the effort. Convincing local employers to participate is possible since it is in the best interest of the employers to have available affordable housing. Two critical elements are important to employers:

  1. Workers need a place to live. When that place is affordable, connected to amenities, safe, and close to their workplace, workers tend to have higher job satisfaction and employers have better retention.
  2. The availability of affordable housing near places of employment can boost recruitment efforts and attract more talent as the available worker pool increases. Shorter commutes can also mean more predictability and reliability for employers and employees alike.

Amazon has already figured this out with their "Amazon Housing Equity Fund." Amazon provides low-rate loans, grants, and partnerships to local governments and nonprofit agencies. The fund is providing more than $2 billion in below-market loans and grants to preserve and create more than 20.000 affordable homes for individuals and families earning moderate to low incomes in communities where the company has a large presence.

Climate Resilience

Housing and transportation are huge contributors to the total domestic carbon footprint affecting U.S. households. The federal government incentivizes affordable housing developers to incorporate green, energy efficiency attributes into new communities. The energy efficiency upgrades also reduce costs of heating and cooling, increasing long-term affordability for residents. Modern designs also provide for better stormwater management, structural improvements, and updated emergency systems.

Economic Mobility

Safe, stable, affordable housing - whether rented or owned - improves long-term outcomes for low-income children in educational attainment, family stability, and future earnings.

Bottom Line: Developers (both for-profit and non-profit) and operators of affordable housing should take a hard look at the possible public options that are available to assist in making housing development and operations more feasible. As noted in this article, there are various financing tools that can be assisted using HUD’s Community Planning & Development Programs. HUD-funded annual CPD programs provide critical financing options to increase the supply of new affordable housing. These programs are certainly worth a look by those in the business of creating and managing affordable housing.

Latest Articles

Navigating Fair Housing in Digital Advertising - Ensuring Non-Discriminatory Ad Delivery

Introduction: The U.S. Department of Housing and Urban Development's Office of Fair Housing and Equal Opportunity has released crucial guidance on how the Fair Housing Act applies to digital advertising in the housing and real estate sectors. With the increasing use of automated systems and artificial intelligence (AI) in ad targeting and delivery, it is essential to understand the potential risks of discriminatory practices and take proactive measures to ensure fairness. Understanding the Risks: It's crucial to grasp how new technologies enable advertisers to target specific audiences while excluding others, potentially leading to discrimination in housing-related ads. The Fair Housing Act prohibits discrimination based on protected characteristics such as race, color, religion, sex, national origin, familial status, or disability. By understanding these risks, you can proactively ensure fairness and avoid potential legal issues. Discriminatory ad targeting can manifest in various ways, including denying information about housing opportunities, targeting vulnerable consumers for predatory products, discouraging potential consumers, and steering home-seekers to specific neighborhoods. Audience Targeting Tools: Ad platforms offer audience categorization tools that segment potential audiences based on various characteristics like gender, age, income, and location. While these tools can be useful, they can also lead to discrimination if used to exclude or target specific groups based on protected characteristics. Advertisers and platforms should be cautious when utilizing these tools for housing-related ads and avoid segmenting audiences based on protected characteristics or proxies. Custom and Mirror Audience Tools: Custom and mirror audience tools allow advertisers to target specific audiences or find similar audiences based on existing data. However, if protected characteristics limit the source audience, these tools can perpetuate discrimination. Advertisers and platforms should carefully analyze the composition of source lists and ensure they are not unjustifiably limited based on protected characteristics. Regular audits of ad delivery outcomes can help identify and mitigate discriminatory practices. Algorithmic Delivery Functions: Ad platforms employ machine learning and AI to determine which ads are delivered to consumers. However, these algorithmic delivery functions can also result in discriminatory outcomes. Ad platforms should ensure their algorithms do not direct housing-related ads based on protected characteristics, leading to steering, pricing discrimination, or other discriminatory practices. Regular testing and adjustments are necessary to minimize disparities and ensure fairness. Recommendations for Advertisers and Platforms: Advertisers need to utilize platforms that actively manage the risk of discriminatory practices to ensure non-discriminatory ad delivery. Ad platforms, on the other hand, play a crucial role in this process. They should create separate processes for housing-related ads, avoid targeting options based on protected characteristics, conduct regular testing, adopt less discriminatory alternatives for AI models, ensure fair pricing practices, and maintain transparency through documentation and auditing. Ad platforms can contribute significantly to fair housing practices by fulfilling these responsibilities. Conclusion: By diligently following the guidance provided by the U.S. Department of Housing and Urban Development, advertisers and ad platforms can contribute to fair housing practices and mitigate the perpetuation of discrimination in digital advertising. This commitment to fairness ensures compliance with the law and fosters a more inclusive and equitable digital advertising landscape. It is crucial to be aware of the risks, implement proactive measures, and work towards non-discriminatory ad delivery to ensure equal access to housing opportunities for all.

Maximize Efficiency and Savings - Sign Up for HUD's Energy and Water Benchmarking Service for Multifamily Properties

HUD recently provided information on its Energy and Water Benchmarking Service, available for sites participating in HUD s Multifamily project-based rental assistance programs. The free service provides participating owners with data on energy and water consumption at their sites. While up to 9,000 properties are eligible for the service, it's concerning that only just over 700 properties have taken advantage of this opportunity. I encourage all eligible property owners to sign up for the Energy and Water Benchmarking Service to ensure they are not missing out on this valuable resource. The Green and Resilient Retrofit Program (GRRP) is a game-changer, offering over $800 million in grant funding and $4 billion in loan commitment authority. It is the first HUD program to invest in energy efficiency, renewable energy generation, climate resilience, and low-embodied-carbon materials in HUD-assisted multifamily housing. This program presents a significant opportunity for property owners to improve their properties and potentially gain financial benefits. Provided Data Leads to Actionable Improvements The service's data is not just numbers but a practical tool that helps owners identify opportunities for energy efficiency improvements. These improvements can benefit residents and promote green investment in individual properties or entire portfolios. Once the data is provided, owners can confidently use it to apply for GRRP grants and loans, knowing they are making informed decisions based on real data. Offers annual property analysis reports identifying usage trends and energy and water savings opportunities. Establishes eligibility for or prepares owners to use federal, state, and utility energy efficiency programs. It supports early compliance with local ordinances as more localities across the country become interested in the energy usage data of multifamily properties. Provides technical assistance, training, and other resources. When an owner signs up for the service, they will receive personalized support in assessing the efficiency of their buildings for up to four years. HUD s contractor, Leidos, will support property owners and management by contacting utilities to access the necessary energy and water use data and provide cost and energy savings recommendations. Registration Information There is no deadline for signing up for the service, but limited funding is available. Owners who delay signing up for the service may miss the opportunity or not be able to take advantage of the full four years of the initiative. Owners and managers interested in the program should email their interest and the property ID(s) to

Webinar Announcement: Tenant-on-Tenant Harassment in Multifamily Housing

A.J. Johnson will host a pivotal webinar titled "Tenant-on-Tenant Harassment in Multifamily Housing: Navigating the Challenges" on June 20, 2024, from 1:00 PM to 2:00 PM Eastern Time. Webinar Overview This essential webinar addresses the pressing issue of tenant-on-tenant harassment in multifamily housing properties. The session will provide property managers and landlords with the knowledge and tools to handle these conflicts effectively, ensuring a safe and respectful living environment for all residents. The webinar will cover the legal implications of harassment, preventative measures, and practical strategies for managing tenant interactions. Key Topics Understanding Harassment: Learn the definitions and examples of tenant-on-tenant harassment. Legal Framework: Gain an overview of the laws and regulations that protect tenants from harassment. Roles and Responsibilities: Understand what landlords and property managers can and should do when faced with tenant complaints. Who Should Attend This webinar is ideal for: Property Managers Landlords Real Estate Professionals Tenant Advocates Legal Professionals Registration Interested participants can register for the webinar on the A.J. Johnson Consulting Services website under the "Training Schedule" section. For more details and to secure your spot, visit Don't miss this opportunity to enhance your understanding and management of tenant-on-tenant harassment in multifamily housing. Register today to ensure your residents a safer and more harmonious living environment.

HUD Proposes Comprehensive Changes to HOME Rules

On May 15, 2024, HUD published a preview of a Notice of Proposed Rulemaking proposing significant changes to the HOME Program. The proposed rule is expected to be published in the Federal Register before June, and public comments are due no later than 60 days after that publication. The proposed rule would make changes in many areas: Community Housing Development Organization (CHDO) Requirements: Major revisions to CHDO requirements are proposed to streamline processes and improve efficiency. HOME Rents Approach: A new methodology for setting HOME rents is being introduced to better align with current housing market conditions. Small-Scale Rental Projects: Requirements for small-scale rental projects will be simplified, making it easier for developers to comply. HOME Tenant-Based Rental Assistance (TBRA) Programs: The proposed changes will provide greater flexibility in TBRA programs, allowing for more effective tenant support. Community Land Trusts (CLTs): New flexibilities and simplified provisions are being proposed to encourage their use and effectiveness. Tenant Protections: The rule would significantly strengthen tenant protections by mandating a HOME tenancy addendum with a uniform set of protections to be included in leases of all HOME-assisted rental housing units. For tenants receiving TBRA, a streamlined set of protections will be required. Advanced Property Standards: HUD proposes incentives for meeting higher property standards incorporating green building practices, enhanced energy efficiency, and innovative construction techniques for new construction, reconstruction, and rehabilitation projects. Homeownership Housing Resale Requirements: Clarifications to resale requirements for homeownership housing are included to ensure transparency and consistency. Technical Amendments and Simplifications: The proposed rule will make technical amendments and simplifications to align with the changes introduced in the 2013 HOME Final Rule. These proposed changes are part of a broader effort to modernize and improve the HOME program, incorporating updates from the Housing Opportunity Through Modernization Act of 2016 (HOTMA), the Economic Growth Regulatory Relief and Consumer Protection Act, and the National Standards for the Physical Inspection of Real Estate (NSPIRE) Final Rule. Additionally, the rule updates citations to align with recent changes to the Office of Management and Budget (OMB) regulations at 2 CFR part 200. HUD plans to publish further rulemaking to ensure consistency across all regulations. The proposed changes are detailed in the Proposed Regulation, with further revisions anticipated following the implementation of the HOTMA and NSPIRE Final Rules. While all the proposed changes are important, I will publish a series of articles in the weeks ahead outlining the proposed changes in four specific areas: (1) HOME Rents, (2) Small Scale Rental Projects, (3) Tenant Protections, and (4) Advanced Property Standards.

Want news delivered to your inbox?

Subscribe to our news articles to stay up to date.

We care about the protection of your data. Read our Privacy Policy.