Item 21 - Amendment to the Affordable Housing Funds Policies and Procedures

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Affordable Housing Funds Policies and Procedures Page 30 2. A rent that does not exceed 30 percent of the adjusted income of a family whose annual income equals 65 percent of the median income for the area, as determined by HUD, with adjustments for number of bedrooms in the unit. The HOME rent limits provided by HUD will include average occupancy per unit and adjusted income assumptions. In rental projects with five or more HOME-assisted rental units, twenty (20) percent of the HOME-assisted units must be occupied by very low-income families and meet one of following rent requirements: 1. The rent does not exceed 30 percent of the annual income of a family whose income equals 50 percent of the median income for the area, as determined by HUD, with adjustments for smaller and larger families. HUD provides the HOME rent limits which include average occupancy per unit and adjusted income assumptions. However, if the rent determined under this paragraph is higher than the applicable rent under 24 CFR 92.252(a), then the maximum rent for units under this paragraph is that calculated under 24 CFR 92.252(a). 2. The rent does not exceed 30 percent of the family's adjusted income. If the unit receives Federal or State project-based rental subsidy and the very low-income family pays as a contribution toward rent not more than 30 percent of the family's adjusted income, then the maximum rent (i.e., tenant contribution plus project-based rental subsidy) is the rent allowable under the Federal or State project-based rental subsidy program. To ensure that HOME investments yield affordable housing over the long term, HOME imposes rent and occupancy requirements over the length of an affordability period. For homebuyer and rental projects, the length of the affordability period depends on the amount of HOME assistance to the project or buyer, and the nature of the activity funded. Table 1-1: Determining the HOME Period of Affordability: HOME Assistance per Unit or Buyer Length of the Affordability Period Less than $15,000 5 years $15,000 - $40,000 10 years More than $40,000 15 years New construction of rental housing 20 years Refinancing of rental housing 15 years Throughout the affordability period, income-eligible households must occupy the HOME- assisted housing. When units become vacant during the affordability period, subsequent tenants must be income eligible and must be charged the applicable HOME rent. Other Requirements Minimum Loan: All HOME investments must total not less than $1,000 multiplied by the number of HOME-assisted units in the project. Maximum Loan: The maximum amount of subsidy per unit shall not exceed the maximum allowed by HUD under the HOME program (24 CFR 92.250), or that provided for under Section IV, Loan Terms, of these Policies and Procedures, whichever is less. The City will avoid Exhibit 1