HOME Rental Rehabilitation Program

The HOME Rental Rehabilitation Loan Program assists owners of existing rental property in preserving the supply of decent, safe, sanitary, lead safe rental housing, occupied by lower income persons or families. At a minimum, the rental property must be in compliance with applicable state and local codes, rehabilitation standards, ordinances, Section 8 Housing Quality Standards, zoning ordinances, must be lead safe and must be occupied by HOME-eligible households at completion of the rehabilitation and through the applicable effective period.

Owners wishing to participate in this program must be financially secure and the building must have a positive cash flow. Individuals, corporations, partnerships, non-profit organizations, and Community Housing Development Organizations may apply for a loan provided they have qualifying interest in the property. Properties must be used primarily for residential purpose; therefore, 51% or more of the gross floor area of the structure must be residential space. The maximum HOME- assistance, per unit, is $14,000, with a minimum loan request of $10,000 per project.

Developments obtaining $100,000 or greater in HOME assistance will receive a 0% deferred loan. Repayment is required upon the earlier of; the sale or transfer of the property, the payment in full of any permanent senior mortgage loan on the Mortgaged Property, the maturity date of any permanent senior mortgage loan on the Property and/or an occurrence of an Event of Default as outlined in the HOME mortgage. Property owners may obtain financing for eligible costs as long as the HOME expenditures do not exceed the established maximum allowance per HOME-assisted unit. Property owners must have existing financing on the property with a mortgage maturity date that extends beyond the Effective Period. Properties will be monitored for compliance with affordability and property standards during the Effective Period.

Developments obtaining less than $100,000 in HOME assistance will receive a 0% loan that will be forgiven after a successful Effective Period. Repayment is required upon the sale or transfer of the property, or an occurrence of an event of default as outlined in the HOME mortgage, if either occur prior to the expiration of the Effective Period. Property owners obtaining a forgivable loan must provide a minimum of 25% of the HOME-eligible costs. Forgivable loans are end loans; therefore, borrowers will be required to obtain construction financing or provide evidence of funds available during the construction period in the amount of the total development cost (TDC). Properties will be monitored for compliance with affordability and property standards during the Effective Period.

This HOME Rental Rehabilitation program is not available in St. Paul, Minneapolis, Duluth and the counties of Anoka, Cook, Dakota, Hennepin, Itasca, Koochiching, Lake, Ramsey, St. Louis, and Washington as those areas have their own set aside of HOME funds and programs.

Individuals working on a rental housing development that contains twelve (12) or more HOME-assisted dwelling units and receive funds under the HOME Program alone, or in conjunction with other funding sources, must be paid an hourly rate not less than the minimum rate specified in the wage decision for each particular development. Borrowers must agree to abide by and ensure compliance with the federal labor standards laws and regulatory requirements. Laws that apply are:

Davis Bacon Act: This act requires that workers receive not less than the prevailing wages being paid for similar work in the locality. Prevailing wages are computed by the Department of Labor (DOL) and are issued in the form of federal wage decisions for each classification of work.

Copeland "Anti-kickback" Act: Workers must be paid at least once a week without any deductions or rebates except permissible deductions, which include taxes, deductions the worker authorized, and those required by court processes. The Act also requires that contractors maintain payroll records and submit weekly payrolls and statements of compliance to the contracting agency.

Contract Work Hours and Safety Standards Act: Workers must receive overtime compensation at a rate 1½ times their regular wage after they have worked 40 hours in one week.

DB-1 Labor Standards Provision

DB-2 Contractor Debarment

DB-3 Notice of Contract Status

DB-4 Contractor/Subcontractor Certification

DB-5 Weekly Report of Subcontractors on Job Site

DB-6 Notice to Employees

DB-7 Employee Interview

DB-8 Wage Restitution

DB-9 Final Compliance Letter

DB-10 Final Compliance Report

Environmental review of HOME Program properties is required by the National Environmental Policy Act (NEPA). In addition to NEPA and the National Affordable Housing Act (NAHA), other laws and regulations apply to the HOME Program with regards to such areas as historic properties, floodplain management and wetland protection, coastal zone management, sole source aquifers, endangered species, wild and scenic rivers, air quality, airport clear zone, farmlands protection, and HUD environmental standards.

ER-1 Statutory Worksheet Manual

ER-1 Statutory Worksheet Form

The URA provides displaced persons with fair, equitable treatment and protection from disproportionate injury by projects designed to benefit the public as a whole. The URA is a government-wide legislation. Guiding Statutes and Regulations are:

The Uniform Relocation and Real Property Acquisition Policies Act of 1970 (URA); this applies to displacement that results from acquisition, demolition, or rehabilitation for HUD-assisted projects carried out by public agencies, nonprofit organizations, private developers, or others and real property acquisition for HUD-assisted projects (whether publicly or privately undertakes).

Section 104(d) of the Housing and Community Development Act of 1974.

Individual HUD program regulations.
Federal regulations governing the HOME program require that all reasonable steps be taken to minimize the displacement of persons (families, individuals, businesses, non-profit organizations and farms) when a property is assisted with HOME funds. Residential tenants must be given a reasonable opportunity to lease and occupy decent, safe, sanitary, lead safe and affordable housing in the development when it is completed.

URA-1 General Notice

URA-2 Guide Form Notice to Persons Not Displaced

URA-3 Guide Form Notice to Prospective Tenant

Any housing developments receiving federal funding must follow HUD’s guidelines for Lead Hazard Evaluation and Reduction. The following links provide additional information

24CFR35: Requirements for Notification, Evaluation and Reduction of Lead-Based Paint Hazards in Federally Owned Residential Property and Housing Receiving Federal Assistance

HUD's on-line Visual Assessment Course: Visual assessments must be performed by a person trained in conducting visual assessments. Property owners subject to 24CFR35 are responsible for conducting visual assessments of all dwelling units annually and at unit turn-over.

3