HUD Proposes New Rule to improve HOME Program


Proposed rule will strengthen oversight of 20-year-old affordable
housing block grant program

WASHINGTON
– U.S. Housing and Urban Development Secretary Shaun Donovan today announced
HUD is proposing new regulatory requirements under its HOME Investment Partnerships Program (HOME). HOME is the largest federal block grant to state and local governments designed exclusively to produce affordable housing for low-income families.Since 1992, the HOME Program has successfully assisted more than one million affordable homes for lower income families. However, Secretary Donovan believes the
program can be strengthened to significantly boost the program’s performance at
the local level.

“The HOME program is a success story for housing low-income Americans and creating jobs,” said Secretary Donovan. “However, there’s more we can do to boost the program’s
performance and accountability. Through these new steps, we want to expand
HOME’s impact and ensure that every dollar is used smartly to help families
afford their homes. Since we took office, we have been committed to
strengthening the HOME Program and ensuring that it creates affordable housing
in an efficient and accountable way.”

In 2009, soon after taking office, the Obama Administration accelerated efforts to
re-write some of the HOME’s compliance rules. Today, HUD is presenting Congress
a proposed rule for a required review period and will shortly publish full
details of the proposed regulatory improvements in the Federal Register. HUD
has found that there are areas in the program’s underlying regulations that can
improve program performance at the local level and ensure that high quality
affordable housing is being provided for low-income families in a way that
delivers the best value to the taxpayer.

Specifically, HUD’s proposed rule would:

  • Require state and local governments to adopt policies and procedures to improve their oversight of  projects, develop a system for assessing the relative risk of projects,  and more closely monitor their HOME-funded sub-recipients;
  • Require state and local  governments to assess a developer’s capacity and the long-term viability  of the project, before they commit HOME funds to a project;
  • Require more frequent reporting by  state and local ‘participating jurisdictions’ to enable HUD to more closely track projects once they’re under way; and
  • Set a higher ‘performance bar’ by  establishing specific timeframes for taking appropriate corrective actions against participating jurisdictions who fail to complete what they  started.

Beyond improving the HOME program’s underlying regulations, HUD is in the process of
improving the Department’s Integrated Disbursement and Information System (IDIS). IDIS is the primary data collection and reporting mechanism for tracking the commitment of HOME funds as well as the actual expenditure of these resources on a project-by-project basis. HUD is making significant changes to IDIS to improve grant management, reduce risk and address troubled projects.