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 HUD Guidance on HOME Issues


The following guidance addresses a number of compliance issues regarding the 2013 Final Home Rule, specifically the review of income source documentation, lease terms and utility allowances.     


1.    Review of Income Source Documentation. The 2013 HOME regulation (24 CFR 92.203) requires the use of income source documentation for HOME- assisted units. Two months of pay history such as paystubs must be used for the income source documentation {92.203 (a) (1) (i) & (a) (2)}. In a memo published by the Office of Program Compliance dated December 17, 2013, OHFA indicated that it would still require employment income to be third-party verified even though the guidance given in Change 4 of the HUD 4350.3 now allows for the resident/applicant wages to be immediately verified with pay stubs.  Due to changes to the HUD HOME rule and a review of our policies we have decided that effective March 1, 2015, the OHFA Employment Verification form will no longer be mandatory for use by owners of OHFA-funding properties.  The form will still be available in the recommended forms section of the OHFA website and OHFA will still encourage its use. 


2.    Lease Terms. A new provision {24 CFR 92.253 (b) (9)} specifies that a tenant's failure to participate in any required supportive services of transitional housing is a permissible basis for terminating a tenancy or refusing to renew the lease. This provision ensures that transitional housing can be made available to individuals who use the transitional housing for its intended purpose. HUD clarified that supportive services cannot be mandatory for tenants of HOME-assisted units, but only for supportive services provided in transitional housing. Owners are cautioned that requiring tenants to accept supportive services (with exception for residents of transitional housing) is a prohibited HOME lease clause. OHFA highly recommends Owners of HOME-assisted properties review their HOME lease to ensure compliance with the new provision.

3.    Utility Allowances. The HOME Rule requires Housing Credit agencies to determine an individual utility allowance for each HOME rental project either (1) by using the HUD Utility Schedule Model or (2) by otherwise determining the allowance based upon the specific utilities used at the project. PHA estimates or other estimates that are not project specific are no longer acceptable. The effective date for implementation of this new Rule was August 23, 2013. However, due to many comments and questions from the industry, HUD issued additional technical guidance indicating the new Rule would apply only to projects awarded HOME funding from January 24, 2015 and beyond. Effective April 1, 2015, OHFA will allow Owners of HOME-assisted properties awarded funding on January 24, 2015 and beyond to submit an individual utility allowance by using either the HUD Utility Model or a utility allowance methodology as described in OHFA's Utility Allowance Policy (Utility Allowance Policies and Procedures). Acceptable methodologies include consumption and an energy consumption model. Owners of HOME-assisted properties awarded HOME funding prior to 2015 may continue to use any utility method described in OHFA's Utility Allowance Policy to include PHA estimates.

Questions about this message may be directed to Betsy Krieger by email at bkrieger@ohiohome.org.



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