OAR 813-120-0050: HOME Affordability Requirements

HOME affordability requirements vary according to the amount of HOME funds invested and the activity involved. The Department may choose to include one or all of the activities in its Program. Affordability is defined as follows: (1) For HOME assisted units in rental housing Projects: (a) Initial and continuing contract rents shall not exceed the lesser of the HUD periodically determined fair market rent (FMR) for comparable-sized units in the area, or a contract rent that does not exceed 30 percent of Adjusted Income of a Family whose income is 65 percent of the area median income as determined by HUD, adjusted for the number of bedrooms in the unit; (b) If the Project contains five or more HOME-assisted units, a minimum of 20 percent of the HOME-assisted units shall be occupied by Very Low-Income Families (A) paying no more than 30 percent of Adjusted Income for rent, or (B) having contract rents not greater than 30 percent of gross annual income of a Family whose income equals 50 percent of area median income, as determined by HUD and adjusted for family size, but under no circumstances shall rents described in (ii) exceed the limits identified in (a) above; (c) The HOME-assisted units shall be occupied only by Low- and Very Low-Income Families; (d) The Project does not refuse leasing HOME-assisted units to a Family participating in the HUD Section 8 rental certificate or voucher program or HOME Tenant-Based Rental Assistance under OAR 813, division 120; and (e) The HOME assisted units of a Project shall remain affordable after Project Completion, enforced by deed restrictions or covenants running with the land, for periods not less than the following based on the amount of HOME assistance per unit regardless of loan or other mortgage terms or ownership transfer: (A) For rehabilitation and/or acquisition of existing housing per unit amount of HOME funds: Under $15,000 — 5 years; $15,000 to $40,000 — 10 years; over $40,000 — 15 years. (B) For acquisition of newly-constructed housing which is acquired within one year of the date of the certificate of initial occupancy, or for new construction, the Project must remain affordable for 20 years. (C) The affordability restrictions may terminate upon foreclosure or other transfer in lieu of foreclosure. If at any time following transfer by foreclosure or transfer in lieu of foreclosure, but if during the term of the affordability period, the owner of record prior to the foreclosure or transfer in lieu of foreclosure, or any entity that includes the former owner or those with whom the former owner has or has had family or business ties, obtains an ownership interest in the Project or property, the affordability restrictions shall be revived according to the original terms. (2) For homebuyer assistance for acquisition (with or without rehabilitation) of existing housing, such housing: (a) (For new construction) has an initial purchase price that does not exceed 95 percent of the median purchase price for the type of single-family housing for the area, as determined pursuant to 24 C.F.R. § 94.254(a)(iii), or (for acquisition with rehabilitation) has an estimated value after rehabilitation that does not exceed 95 percent of the median purchase price for the area for the type of single-family housing, as determined pursuant to 24 C.F.R. § 94.254(a)(iii); (b) Shall, during the affordability period, be the principal residence of an owner whose Family qualifies as a Low-Income Family at the time of purchase; and (c) Is subject to resale restriction or recapture provisions pursuant to 24 C.F.R. § 92.254, from Project Completion for minimum periods based upon the amount of HOME assistance provided: Less than $15,000 — 5 years; $15,000 to $40,000 — 10 years; over $40,000 — 15 years. (3) For homeowner rehabilitation Projects without acquisition: (a) The housing is the principal residence of an owner whose Family qualifies as a Low-Income Family at the time HOME funds are committed to that housing; and (b) The after-rehabilitation estimated value of the property shall not exceed 95 percent of the median purchase price for the area for the type of single-family housing as determined pursuant to 24 C.F.R. § 94.254(a)(iii). [Publications: Publications referenced are available from the agency.]