Guide to Federal Housing Programs: HUD Programs

A Guide to Federal Housing and Community Development Programs for Small Towns and Rural Areas

Permission is granted ONLY to nonprofit community-based organizations to reproduce and/or adapt this document, and only for their own use.

II. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PROGRAMS

The U.S. Department of Housing and Urban Development (HUD) administers a wide variety of programs including the 32 housing programs described in this section and seven of the homeless assistance programs described in Section III of this manual. As of January 2002, the department operated about 100 active programs. Except for the Rural Housing and Economic Development and the Mortgage Insurance for Outlying Area Properties programs, no HUD-administered programs are authorized exclusively for use in nonmetro and/or rural areas. Funds from other HUD programs are accessed by rural areas to varying degrees. This section provides information on the HUD programs that are most accessible to renters, owners, and housing providers in small towns and rural areas.

HUD has field offices spread throughout the country, with at least one in every state. HUD generally recommends contacting field offices to obtain information or apply to programs. These offices can be located on line at http://www.hud.gov/local.

Eligibility requirements for HUD programs vary, so it is not possible to set forth general definitions applicable to all programs as in the RHS section of this guide. To determine eligibility for a particular HUD program, check with the contact listed.

HUD has recently revised and in a few cases eliminated some of its more popular programs. For example, the Section 8 Rental Voucher Program (CFDA 14.855) and the Section 8 Rental Certificate Program (CFDA 14.857) were combined to make up the Section 8 Housing Choice Voucher Program (CFDA 14.871). The Indian Housing Block Grant program, created by the Native American Housing Assistance and Self Determination Act (NAHASDA), replaced several programs previously administered by HUD's Office of Native American Programs (ONAP). Programs such as HOPE I and HOPE III have been eliminated as well.

The three major divisions of this section of this guide are organized according to HUD's administrative structure, not necessarily by the types of programs described.

PUBLIC, INDIAN, AND ASSISTED HOUSING PROGRAMS
1. General Information
  Public housing, the traditional low-rent housing program created by the United States Housing Act of 1937, was the nation's primary low-income housing program until the establishment of the privately owned interest-subsidy programs in the late 1960s and the expansion of the leasing programs in the 1970s. In July 1998 there were over 3,300 public housing agencies and Indian housing authorities operating over 4.3 million units. The units house more than 10.6 million people across the country.²
2. Public Housing (CFDA 14.850)
  While the term "public housing" is sometimes used to refer to all subsidized housing, it is actually a much narrower category. Public housing is owned by the government, while other subsidized housing is owned by private entities (either for-profit or nonprofit), which receive some sort of government funding to help make the units affordable.
  1. Purpose
    Under HUD's Public Housing program, Public Housing Authorities (PHAs) are created under state law to provide and operate cost-effective, decent, safe, and affordable rental housing to low-income families.
  2. Eligibility
    1. Applicant. PHAs established in accordance with state law are eligible. The proposed program must be approved by the local governing body, and must be consistent with the PHA's annual PHA Plan submitted to HUD. Under the Native American Housing Assistance and Self-Determination Act of 1996, Indian Housing Authorities are no longer eligible for funds for public housing.
    2. Beneficiary. Public housing occupants include low-income families or singles within prescribed income limits, including eligible immigrants, individuals who are 62 years old or older, persons with disabilities, or the remaining member of a tenant family. Other low-income individuals may be served under certain limited circumstances.
  3. Terms
    HUD makes annual contributions to PHAs for debt service payments for commitments approved on or prior to September 30, 1986. HUD provides direct funding of capital costs (grants) to PHAs for commitments approved after September 30, 1986.
    
    Previously PHAs were eligible for additional capital grant funding for modernization. This program has been combined with HUD's public housing development for operating subsidies to help defray the difference between income from tenant charges and the costs of operation and management, including reserve funds. Funds may also be used for the major reconstruction of obsolete existing public housing projects.
  4. Contact
    Contact a HUD Field Office
    or
    Assistant Secretary for Public and Indian Housing,
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-0950
    www.hud.gov/progdesc/pihindx.cfm
3. Public Housing Capital Fund Program (CFDA 14.872)
  1. Purpose
    The Public Housing Capital Fund Program (CFP) makes funds available to public housing agencies for capital and management activities. Funds can also be used for modernization and development of public housing. Programs that formerly offered similar assistance were the Public and Indian Housing Modernization – Comprehensive Improvement Assistance Program (CFDA 14.852) and the Comprehensive Grant Program (CFDA 14.859).
  2. Eligibility
    Public housing agencies who operate PHA-owned housing projects are eligible, and must serve low-income housing residents.
  3. Terms
    Public housing agencies consult with local government officials and PHA residents as they plan for activities to be included in the CFP as a part of their pre-application coordination. The CFP is one component of a PHA's annual plan. CFP eligible recipients are notified in writing by HUD headquarters every year of their annual grant amount. CFP funds must be allocated within two years and expended in four years.
  4. Contact
    Contact a HUD Field Office
    or
    Assistant Secretary of Public and Indian Housing
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-0950
    http://www.hud.gov/progdesc/pihindx.cfm
4. Section 8 Housing Choice Vouchers (CFDA 14.871)
  1. Purpose
    This program combines the Section 8 Rental Voucher Program (CFDA 14.855) and the Section 8 Certificate Program (CFDA 14.857). According to the legislation enacting the change, it was meant to "assist in making tenant-based rental assistance more successful at helping low-income families obtain affordable housing and [to] increase housing choice for low-income families." Vouchers provide payments to participating owners on behalf of eligible tenants.
  2. Eligibility
    1. Applicant. Applicants are limited to public housing agencies and Indian housing authorities.
    2. Beneficiary. The primary beneficiaries of the program are very low-income families, those with incomes below 50 percent of area median income. On an exception basis, low-income families (with incomes below 80 percent of area median income) are eligible. Income limits are established by HUD every year, and are available at http://www.huduser.org/datasets/il.html or from HUD offices.
  3. Terms
    1. Applicant. The program is administered by PHAs and IHAs under five-year contracts with HUD.
    2. Beneficiary. Rental vouchers are assigned to specific families. The amount of federal subsidy is based on the family's income and a payment standard that reflects the average costs of standard rental units for a given market area. The amount of assistance a family receives generally equals the difference between the payment standard and 30 percent of the family's monthly income, with allowable adjustments. The tenant is responsible for any remaining amount that is due the landlord.
      A participating family is free to pay more than 30 percent of its adjusted income for rent as long as the unit meets HUD's Housing Quality Standards. A participating family can pay less than 30 percent of its adjusted income for rent if the family is able to rent a standard unit for less than the predetermined payment standard.
  4. Contact
    Contact a HUD Field Office
    or
    Office of Assisted Housing
    Rental Assistance Division
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-0477
    http://www.hud.gov/progdesc/pihindx.html
5. Family Self-Sufficiency
  1. Purpose
    Administered by public housing agencies (PHAs), the Family Self-Sufficiency (FSS) program encourages communities to develop local strategies to help assisted families obtain employment that will lead to economic independence and self-sufficiency.
  2. Eligibility
    Families who receive assistance under the Section 8 voucher program are eligible to participate in the FSS program.
  3. Terms
    The PHA establishes an interest-bearing escrow account for each participating family. As the family's earned income increases, the PHA credits additional funds to the escrow account. If the family successfully completes the five-year FSS contract, the family receives the money in the account. The PHA may also make a portion of the account available during the contract to enable the family to complete an interim goal such as education. Even after successful completion of a contract, if a family still needs housing assistance they are still eligible for their Section 8 voucher.
    
    FSS program services may include a wide variety of things, depending on what each family needs in order to achieve self-sufficiency. Some possible services are child care, transportation, education, job training, and employment counseling, substance/alcohol abuse treatment or counseling, household skill training and homeownership counseling. Services are not, however, limited to those listed above.
    
    To operate either a voluntary or mandatory FSS program, a PHA must establish an FSS program coordinating committee and develop an FSS action plan.
  4. Comments
    The five-year FSS contract specifies goals and services for each family. Family members must fulfill all requirements in order to obtain full benefits. The FSS contract requires that the family comply with the lease, that all family members become independent of welfare, and that the head of the family seek and maintain suitable employment.
  5. Contact
    A local public housing agency
    or
    Office of Public and Indian Housing
    Department of Housing and Urban Development
    451 7th Street, S.W.
    Room 7134
    Washington, DC 20410
    202-708-0950
    http://www.hud.gov/offices/pih/programs/hcv/fss.cfm
6. Resident Opportunity and Supportive Services (CFDA 14.870)
  1. Purpose
    Through the Resident Opportunity and Supportive Services (ROSS) program HUD provides supportive services and resident empowerment activities, and assists public housing residents in becoming economically self-sufficient. The primary focus of the program is on "welfare to work" and on independent living for the elderly and persons with disabilities. Grants may be used for economic development and supportive services activities, organizational development, mediation, and the employment of service coordinators/case managers.
  2. Eligibility
    1. Applicant. Public and Indian housing agencies and tribally designated housing entities, resident management corporations, resident councils or resident organizations, including nonprofit entities supported by residents, may administer ROSS programs.
    2. Beneficiary. Residents of conventional public housing are eligible to receive benefits from the ROSS program.
  3. Terms
    Requirements for matching funds may be included in HUD's NOFAs. HUD will provide assistance for a two-year time period.
  4. Contact
    Customer Services and Amenities Division
    Office of Public and Assisted Housing Delivery
    Public and Indian Housing
    U.S. Department of Housing and Urban Development
    Room 4224
    451 Seventh Street, S.W.
    Washington, DC 20410
    202-708-4214 voice
    202-708-0850 TDD
    http://www.hud.gov/progdesc/pihindx.cfm
7. Public and Indian Housing Drug Elimination Program (CFDA 14.854)
  1. Purpose
    Project grants, direct payments for specified uses and training funds were available to PHAs, tribally designated housing authorities and Indian housing authorities to reduce/eliminate drug-related crimes in or near housing projects and to encourage them to create initiatives to address drug-related crime. Congress did not provide funding for this program in FY 2002 or 2003.
    
    Funds could be used for:
    
    i) employment of security personnel;
    ii) reimbursement of local law enforcement agencies (under certain provisions);
    iii) physical improvements designed to enhance security;
    iv) employment of individuals to investigate drug-related crimes and to provide evidence related to a drug-related crime in any administrative or judicial proceeding;
    v) establishment of voluntary tenant patrols acting in cooperation with local law enforcement;
    vi) programs to reduce drug use, including those focused on drug prevention, intervention, referral, and treatment;
    vii) training, communication equipment for HUD-authorized housing authority police departments that will enhance security; and
    viii) gun buy-back initiatives.
  2. Eligibility
    PHAs, TDHEs, and IHAs were eligible for this program. A recipient could itself undertake any eligible activity under this program or it could contract with a qualified third party, including a resident management corporation or a resident council.
  3. Terms
    Grantees were required to use the grant according to their approved work plan, which usually would not exceed 24 months.
  4. Contact
    Contact a HUD Field Office
    or
    Community Safety and Conservation Division,
    Public and Assisted Housing Delivery
    Office of Public and Indian Housing
    U.S. Department of Housing and Urban Development
    Room 4206
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-1197
    http://www.hud.gov/progdesc/pihindx.cfm
8. Indian Housing Block Grants (CFDA 14.867)
  1. Purpose
    
    The Indian Housing Block Grant program was created by the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA). It separated Indian housing from public housing. Under NAHASDA, most HUD funds for Indian housing are provided to tribes or tribally designated housing entities (TDHEs) as block grants. Recipients may use the funds in a variety of ways, including for development of new units, assistance to residents of existing units, provision of services, management, crime prevention and safety, and more.
  2. Eligibility
    1. Applicant. An Indian tribe or TDHE is eligible for Indian housing block grant funds when it submits an Indian housing plan that complies with NAHASDA requirements.
    2. Beneficiary. Funds are to aid families with incomes below 80 percent of area median. Ten percent of each grant can be used to serve families between 80 and 100 percent of area median income. Families who exceed 100 percent of the median income can apply for funding if approved by HUD's headquarters office.
  3. Terms
    
    Amounts made available for assistance will be allocated to Indian tribes in compliance with the requirements under NAHASDA. Within two years of a grant award, no less than 90 percent of the grant must be obligated.
  4. Contact
    
    National Office of Native American Programs
    U.S. Department of Housing and Urban Development
    1999 Broadway
    Suite 3390
    Box 90
    Denver, CO 80202
    303-675-1600
    http://www.hud.gov/progdesc/pihindx.cfm
9. Indian Community Development Block Grant Program (CFDA 14.862)
  1. Purpose
    
    Indian tribes and Alaskan Natives may use this program to improve the housing stock, provide community facilities, make infrastructure improvements and expand job opportunities by supporting the economic development of their communities. Eligible activities include housing rehabilitation programs, acquisition of land for housing, direct assistance to facilitate homeownership among low- and moderate-income persons, construction of tribal and other facilities for single- or multi-use, streets and other public facilities, and economic development projects. Eligible activities do not include construction and improvement of government facilities, the purchase of equipment, general government expenses, operating and maintenance expenses, political activities, new housing construction (except through community-based development organizations), or income payments.
  2. Eligibility
    1. Applicant. Any Indian tribe, band, group, or nation (including Alaskan Indians, Aleuts, and Eskimos) and any Alaskan Native Village is eligible for assistance.
    2. Beneficiary. Low- to moderate-income persons may receive assistance under this program. Moderate income is generally defined as 80 percent of the area median income, as determined by HUD, adjusted for family size.
  3. Terms
    
    Funding amounts and application deadlines are published each year in a Notice of Funding Availability in the Federal Register. Once committed, assistance is available until project completion, usually within two years.
  4. Contact
    Contact a HUD Field Office
    or
    Office of Block Grant Assistance
    Community Planning and Development
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-1322
    http://www.hud.gov/progdesc/cpdindx.cfm
10. Loan Guarantees for Indian Housing (Section 184) (CFDA 14.865)
  1. Purpose
    
    The Section 184 program provides homeownership opportunities to Native Americans, tribes, tribally designated housing entities, and Indian housing authorities on Indian land. It guarantees mortgage loans made by private financial institutions for the acquisition or rehabilitation of existing homes, purchase, and rehabilitation of homes or construction of new homes.
  2. Eligibility
    
    The homeowner is the ultimate beneficiary of the program. The loan applicant must be a Native American, including Alaska Natives, or a Tribally Designated Housing Entity (TDHE), tribe, or an Indian housing authority (IHA) that meets certain requirements. The financial institution that originates the loan must meet certain requirements. When a TDHE or IHA is the home buyer, it is then able to resell or to rent out the property.
  3. Terms
    
    A borrower applies for a loan through a private lender approved by HUD. The lender prepares the loan application and submits it to HUD.
    
    The tribe must demonstrate that a legal and administrative framework exists that is sufficient to protect the interests of the borrower, the lender, and HUD. To establish this legal and administrative framework, tribes must have adopted procedures for foreclosure, eviction, priority of liens, and leasing that will apply to Section 184 loans wherever the tribal court has legal jurisdiction.
  4. Contact
    Director, Office of Loan Guarantee
    National Program Office of Native American Programs
    U.S. Department of Housing and Urban Development
    1999 Broadway
    Suite 3390
    Box 90
    Denver, CO 80202
    303-675-1600
    http://www.hud.gov/offices/pih/ih/homeownership/184/index.cfm
11. Title VI Federal Guarantees for Financing Tribal Housing Activities (CFDA 14.869)
  1. Purpose
    
    By issuing guaranteed/insured loans this program assists Indian tribes and TDHEs in obtaining financing for affordable housing activities under the Indian Housing Block Grant program where an obligation cannot be completed without such guarantee.
  2. Eligibility
    The borrower must be a federally recognized Indian tribe or TDHE that is an approved recipient for Indian Housing Block Grant funds.
  3. Terms
    Borrowers may be required to pledge security in addition to IHBG funds. The term of the loan may exceed 10 years, as approved by HUD. The lender will determine the length of the repayment period for each project.
  4. Contact
    Director, Office of Loan Guarantee
    National Office of Native American Programs
    U.S. Department of Housing and Urban Development
    1999 Broadway
    Box 90
    Denver, CO 80202
    303-675-1600
    http://www.hud.gov/offices/pih/ih/homeownership/titlevi/index.cfm
COMMUNITY DEVELOPMENT PROGRAMS
1. General Information
  Title I of the Housing and Community Development Act of 1974 replaced eight categorical grant and loan programs with one program – the Community Development Block Grant (CDBG). HUD's Office of Community Planning and Development (CPD) handles the CDBG program for small cities and Indian tribes. CPD also administers the HOME Investment Partnerships (HOME) program, created by the National Affordable Housing Act of 1990.
2. Community Development Block Grants/Small Cities Program (CDBG Small Cities) (CFDA 14.219)
  1. Purpose
    The purpose of the Small Cities CDBG program is to help smaller communities develop by providing decent housing, a suitable living environment, and economic opportunities principally for persons of low and moderate income. The program is also intended to help prevent community deterioration and to address serious threats to community health or welfare.
  2. Eligibility
    Under the CDBG program, communities over 50,000 in population are usually "entitled" to an annual grant. Communities under 50,000 are eligible to compete within their respective states for non-entitlement CDBG funds.
    States may elect to administer the "Small Cities" or non-entitlement portion of the CDBG funds. All states except Hawaii have chosen to do so. These states are responsible for designing and implementing their own programs and for administering their own funding competitions. Hawaii's competition, as well as the rest of its Small Cities program, is administered by HUD.
    At least 70 percent of a Community Development Block Grant must benefit low- and moderate-income persons.
  3. Terms
    Competition is held on an annual basis, but it is not unusual for a single purpose or a comprehensive program to take more than 12 months to complete, depending on the activities undertaken. Demands for grants far exceed the available funds.
    Applications are ranked according to national standards as well as state criteria to ensure that grants are fairly and equitably awarded. Applicants are funded based on the final ranking of the application to the extent funds are available. Rating factors may include absolute number and percent of persons in poverty, impact of the proposed program, and past performance in meeting national objectives in housing and equal opportunity.
  4. Comments
    This program can be used to provide decent housing at a price low- and moderate-income families can afford. Small Cities CDBG grants can encourage rural housing construction as they can be used for housing development such as rehabilitation and site clearance. Grants can also be used to provide direct homeownership assistance to low- and moderate-income people.
    In addition, CDBG funds can be used to acquire, construct, reconstruct, or install water and sewer facilities, sewage treatment works, and other such facilities. These funds can also pay for administrative costs such as planning and related activities, data gathering, surveys, detailed architectural or engineering studies, and administrative activities such as budgeting and proposal writing.
    Local government grantees may fund community and economic development activities by neighborhood-based nonprofit organizations if these activities fit the CDBG objectives and requirements.
  5. Contact
    Contact a HUD Field Office
    or
    Office of Block Grant Assistance
    Community Planning and Development
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-1322
    http://www.hud.gov/offices/cpd/communitydevelopment/programs/cdbg.cfm
3. Community Development Block Grants/Special Purpose Grants/Insular Areas (CFDA 14.225)
  1. Purpose
    This program provides community development assistance to the Pacific Islands of American Samoa, Guam, the Northern Mariana Islands, and the Virgin Islands in the Caribbean.
  2. Eligibility
    The island governments of American Samoa, Guam, the Northern Mariana Islands, and the Virgin Islands are eligible. The main beneficiaries of CDBG funds are low- and moderate-income persons, with low and moderate income generally defined as 80 percent of the median income for the territory, as adjusted by family size.
  3. Terms
    There is no match requirement. The funds are allocated according to population size and past performance of the applicants.
  4. Contact
    Office of Block Grant Assistance
    Community Planning and Development
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-1322
    http://www.hud.gov/offices/cpd/communitydevelopment/programs/cdbg.cfm
4. Community Development Block Grants/Special Purpose Grants/Technical Assistance Program (CFDA 14.227)
  1. Purpose
    The technical assistance program was intended to help states, units of general local government, Indian tribes, and areawide planning organizations to plan, develop, and administer local CDBG programs. No funds have been appropriated for it since FY 1999.
  2. Eligibility
    States, units of general local government, Indian tribes, areawide planning organizations, and groups designated by such government units were eligible for these funds.
  3. Terms
    Generally, projects were funded to operate for one to two years.
  4. Contact
    Office of Management and Technical Assistance
    Community Planning and Development
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-3176
5. Opportunities for Youth – Youthbuild Program (CFDA 14.243)
  1. Purpose
    The Youthbuild program provides grants to nonprofit organizations to assist high-risk youth between the ages of 16 and 24 to learn housing construction skills and to complete their high school education. Program participants enhance their skills as they construct and/or rehabilitate affordable housing for low- and moderate-income persons.
  2. Eligibility
    1. Applicant. Grants are available to public or private nonprofit agencies, public housing authorities, state and local governments, Indian tribes, and organizations eligible to provide education and employment training under federal employment training programs.
    2. Beneficiary. The program benefits very low-income high school dropouts between the ages of 16 and 24. Up to 25 percent of participants may have higher incomes or a high school education, but must have educational needs that justify their inclusion in the program.
  3. Terms
    Grants are provided on a competitive basis. Grants can be used for educational job training services, leadership training, counseling, and other support activities, as well as on-site training in housing rehabilitation or construction work (which must account for at least half of each participant's time).
  4. Contact
    Office of Economic Development
    Office of Community Planning and Development
    U.S. Department of Housing and Urban Development
    451 7th Street, S.W.
    Room 7134
    Washington, DC 20410
    202-708-2035
    www.hud.gov/progdesc/cpdindx.html
6. Rural Housing and Economic Development Program (CFDA 14.250)
  1. Purpose
    Created in 1999, the Rural Housing and Economic Development (RHED) program provides grants to rural nonprofit community development corporations and Indian tribes to build capacity, develop innovative housing, and create and strengthen economic development programs. Initially the program divided funds into three categories – capacity building, support for innovative activities, and seed support – but later funding rounds may not use the same topics.
  2. Eligibility
    Local rural and nonprofit community development corporations and Indian tribes are eligible for the three types of grants available. State housing finance agencies and state community and economic development agencies can apply only for the innovative activities grants.
    The program defines a "rural" area in its own unique way as a place that meets any one of five criteria:
    1. a place having fewer than 2,500 inhabitants (within or outside of metropolitan areas);
    2. a county with no urban population (i.e., city) of 20,000 inhabitants or more;
    3. territory, persons, and housing units in the rural portions of "extended cities," as defined by the Census Bureau;
    4. open country which is not part of or associated with an urban area, as defined by USDA;
    5. any place with a population not in excess of 20,000 and not located in a Metropolitan Statistical Area.
  3. Terms
    Competition is required for all three types of grants. No matching funds are required. Funding is for a period of 36 months.
  4. Contact
    Jackie Mitchell
    Rural Housing and Economic Development Coordinator
    Community Planning and Development
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-2290
    http://www.hud.gov/rhed.cfm
7. HOME Investment Partnerships Program (CFDA 14.239)
  1. Purpose
    The HOME program provides funds to states, local governments, and Indian tribes for housing rehabilitation, tenant-based assistance, assistance to first time homebuyers, and new construction. Funds may also be used for site acquisition, site improvements, demolition, and relocation. The provision of transitional and/or permanent housing for the homeless is an eligible activity. Participating jurisdictions determine how their HOME funds will be spent through a consolidated planning process that requires public participation. Nonmetro and rural areas are generally provided HOME funds through their states.
  2. Eligibility
    1. Applicant. States, cities, urban counties, local government consortia, and U.S. territories are eligible to receive formula allocations. Nonprofit intermediary organizations are eligible to receive funds from a HOME technical assistance set-aside.
    2. Beneficiary. Housing developed with HOME funds must serve low- and very-low income families. At least 90 percent of HOME funds used for rental housing must be invested in affordable units that are occupied by families whose incomes are at or below 60 percent of area median income. The remaining 10 percent must be invested in units occupied by families at or below 80 percent of area median income. Homeowners assisted with HOME funds must have incomes at or below 80 percent of the area median income and the residence must be valued at or below 95 percent of the median area purchase price.
  3. Terms
    As of Fiscal Year 2001, jurisdictions must meet the following matching requirements. For rehabilitation, substantial rehabilitation, rental assistance, or acquisition of existing housing, the jurisdiction matches 25 cents in state/local funds for every four HOME dollars expended. For new construction, the jurisdiction matches 30 cents for every HOME dollar. Non-state jurisdictions that are experiencing fiscal distress (as determined by HUD) or are located in major disaster areas are entitled to 50 percent or 100 percent match reductions.
    Formula allocations are drawn down based upon individual project development progress. All funds must be committed within 24 months. Agreements for technical assistance funds are for three-year terms.
    Participating jurisdictions are required to set aside a minimum of 15 percent of their HOME funds for community housing development organizations (CHDOs) to develop, sponsor, or purchase housing. Up to another 5 percent may be used for CHDO operating expenses.
  4. Contact
    Contact a HUD Field Office
    or
    Office of Affordable Housing Programs
    Community Planning and Development
    U.S. Department of Housing and Urban Development
    Room 7164
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-2470
    http://www.hud.gov/progdesc/cpdindx.html
8. Self-Help Homeownership Opportunity Program (CFDA 14.247)
  1. Purpose
    The Self-Help Homeownership Opportunity Program (SHOP) provides funds for land acquisition and infrastructure improvements for sites on which self-help housing will be developed. Low-income homebuyers contribute "sweat equity" toward the construction of their homes.
  2. Eligibility
    1. Applicant. Funds are available to nonprofit national or regional organizations or consortia that have experience in providing self-help housing homeownership opportunities based upon submission and approval of an expression of interest.
    2. Beneficiary. Low-income families who are unable to afford to purchase dwellings, and who provide significant amounts of sweat equity or volunteer labor to the development of the dwellings, are the ultimate beneficiaries.
  3. Terms
    Funding availability is announced in an annual NOFA published in the Federal Register. For SHOP's first several years, HUD has limited SHOP expenditures to $10,000 per lot, and has required that homes be completed within two or three years.
  4. Contact
    Office of Affordable Housing Programs
    Community Planning and Development
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-3226
    http://www.hud.gov/progdesc/cpdindx.cfm
9. Housing Opportunities for Persons with AIDS (CFDA 14.241)
  1. Purpose
    The Housing Opportunities for Persons with AIDS (HOPWA) program provides states and localities with the resources and incentives to devise long-term comprehensive strategies for meeting the housing needs of persons with AIDS or related diseases and their families. Program activities include counseling, information, and referral services to assist eligible individuals to locate, acquire, finance, and maintain housing; developing housing assistance resources; acquiring and rehabilitating buildings; constructing single room occupancy dwellings and community residences; providing rental assistance or short-term financial assistance or supportive services; and covering operating costs, technical assistance, and administrative expenses.
  2. Eligibility
    1. Applicant. Entitlement grants are awarded to states and cities with the largest number of AIDS cases. States, local governments and nonprofit organizations are eligible to compete for funding.
    2. Beneficiary. Low-income persons with AIDS or related diseases, including HIV infection, and their families are the program's beneficiaries. Regardless of income, persons with AIDS may receive housing information. Persons living near community residences may receive educational information.
  3. Terms
    General standards for housing activities are established, including minimum use periods for structures (10 years for new construction, substantial rehabilitation, or acquisition and three years for other non-substantial rehabilitation or repair). Resident rent payments are required for rental assistance and for residing in rental housing.
  4. Contact
    Contact a HUD Field Office
    or
    Office of HIV/AIDS Housing
    Community Planning and Development
    U.S. Department of Housing and Urban Development
    Room 7212
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-1934
    http://www.hud.gov/cpd/hopwaom.html
FHA/HOUSING PROGRAMS
1. General Information
  The Federal Housing Administration (FHA), a part of HUD, was created to encourage lenders to make loans by insuring the borrower's payment to the lender if the borrower defaults on the loan. In this way, FHA encourages private lenders to make loans they might not normally risk. With FHA approval, banks, savings and loans, thrifts, and mortgage companies can participate in FHA's lending programs. FHA has a number of programs that insure mortgages to finance the acquisition, construction, and/or rehabilitation of single-family homes or multifamily projects. Borrowers or project sponsors apply for FHA mortgage insurance through an FHA-approved private lending institution.
  FHA programs are overseen by the Assistant Secretary for Housing of the Federal Housing Commissioner's office at HUD, which also oversees HUD Housing Programs (not to be confused with the Public Housing programs also operated by HUD). The HUD Housing Programs that are most accessible to rural and nonmetro areas are the Housing Counseling, Housing for the Elderly (Section 202), and Supportive Housing for Persons with Disabilities (Section 811) programs, and home mortgage insurance (including manufactured home loan insurance).
2. Mortgage Insurance – Homes (Section 203(b)) (CFDA 14.117)
  1. Purpose
    Section 203(b) is the best known FHA mortgage program. Through this program, the FHA insures mortgages made by qualified lenders to people purchasing or refinancing a home. The program helps low- and moderate-income families to become homeowners by lowering some of the costs of their mortgage loans. Additionally, the program encourages lenders to make loans to otherwise creditworthy borrowers and projects that might not be able to meet conventional underwriting requirements, by protecting the lender against loan default on mortgages.
  2. Eligibility
    FHA-approved lending institutions, such as banks, mortgage companies, and savings and loan associations, can make insured Section 203(b) loans. Eligible borrowers include anyone who buys a home costing less than the Section 203(b) limits and intends to occupy it as their principal residence. The homebuyer applies to the mortgage lender, not directly to HUD.
  3. Terms
    Insured mortgage loans may be used to finance the purchase of proposed, under construction, or existing one- to four-family housing, as well as to refinance indebtedness on existing housing.
    For most borrowers, the maximum amount of the loan is the property's sales price (or appraised value, if less) exclusive of any borrower-paid closing costs multiplied by a percent that is determined by the sales price or value if less and the average closing cost for the state.
    The mortgage term may extend for 30 years.
  4. Comments
    The Section 203(b) loan limits are used for some other programs as well. They vary by location and are available at https://entp.hud.gov/idapp/html/hicostlook.cfm or from HUD offices. As of January 1, 2003, the basic limit is $154,896, the limit in high cost areas is $280,749, and the limit in Alaska, Guam, Hawaii, and the Virgin Islands is $421,123.
  5. Contact
    Contact a HUD-approved mortgage lender
    or
    a HUD Field Office
    or
    Federal Housing Administration
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-0317
    http://www.hud.gov/progdesc/snglindx.cfm
3. Interest Reduction Payments – Rental and Cooperative Housing for Lower Income Families (CFDA 14.103)
  1. Purpose
    In order to lower the housing costs for low- and moderate-income families, HUD provides interest reduction payments to eligible mortgagors for quality rental and cooperative housing. Although HUD is no longer accepting applications from potential mortgagors, individuals and families can still apply to rent units in properties with mortgages guaranteed under this program.
  2. Eligibility
    1. Applicant. Eligible mortgagors included nonprofit, cooperative, builder-seller, investor-sponsor, and limited-distribution sponsors.
    2. Beneficiary. Families and individuals, including people who are elderly or have disabilities or those displaced by government action or natural disaster, are eligible to receive the benefits of the subsidies. At the time of admission their income must fall within certain locally determined income limits. Families with higher incomes may occupy apartments, but may not benefit from subsidy payments.
  3. Terms
    Assistance payments are paid monthly by HUD to the mortgagee, and may bring the effective interest rate paid by the mortgagee down to as low as 1 percent. Assisted families are required to pay rent at least equal to 30 percent of their adjusted income (income after certain allowable adjustments), but not more than the fair market rent established by HUD. The mortgage term usually extends for 40 years. Interest reduction payments may extend for the full term of the mortgage. For individual families, assistance ceases when their income rises to the point where they can afford the full market rent without the benefit of assistance.
  4. Contact
    Contact the HUD Field Office with jurisdiction over the area where the units will be located
    or
    Office of Multifamily Housing Management
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-3730
    http://www.hud.gov/groups/multifamily.cfm
4. Manufactured Home Loan Insurance – Financing Purchase of Manufactured Homes as Principal Residences of Borrowers (Title I) (CFDA 14.110)
  1. Purpose
    This program, popularly known as the Title I manufactured housing program, insures lenders against loss on loans to purchase manufactured homes that are to be principal residences for the borrowers. The maximum loan limit is $48,600. The borrower must give assurance that the site complies with local zoning and land development requirements.
  2. Eligibility
    This program has no income limits; all persons are eligible to apply.
  3. Terms
    Loan terms are for up to 20 years and 32 days. A 5 percent down payment is required from the borrower. The interest agreed upon is between the borrower and lender.
  4. Contact
    Borrowers must use a local FHA-approved lending institution. However, if additional information is needed, contact a HUD Field Office
    or
    Home Mortgage Insurance Division
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    1-800-767-7468 or 202-708-2880
    http://www.hud.gov/progdesc/manuf14.cfm
5. Mortgage Insurance – Homes in Outlying Areas (Section 203(i)) (CFDA 14.121)
  1. Purpose
    FHA provides insured loans to finance the purchase of proposed, under construction, or existing single-family, non-farm housing or new farm housing on two and one-half or more acres adjacent to an all-weather public road. The maximum insurable loan amount is 75 percent of the Section 203(b) loan limit for the area.
  2. Eligibility
    This program has no income limits; all persons are eligible to apply.
  3. Terms
    The mortgage term may extend for 30 years (or 35 years if the mortgagor is unacceptable under a 30-year term and the property was constructed subject to HUD or VA inspection).
  4. Comments
    For most families, the maximum amount of the loan is 97 percent of the first $25,000 of the appraised value and closing costs, plus 95 percent of the remainder. The down payment is the difference between the maximum loan and the purchase price of the home.
  5. Contact
    Borrowers must use a local FHA-approved lending institution. For additional information, contact a HUD Field Office
    or
    Insured Single-Family Development Division
    Office of Single-Family Housing
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-2700
    http://www.hud.gov/progdesc/snglindx.html
6. Mortgage Insurance – Manufactured Home Parks (CFDA 14.127)
  1. Purpose
    This program provides insurance on mortgages to finance the construction or rehabilitation of manufactured home parks of five or more spaces. The maximum mortgage limit is $9,000 per space, except in high-cost areas where the limit may be increased by up to 140 percent on a case-by-case basis.
  2. Eligibility
    Eligible applicants are investors, builders, developers, and others who meet HUD requirements.
  3. Terms
    Loans can cover up to 90 percent of the estimated value. The maximum mortgage term is 40 years or not in excess of three-fourths of the remaining economic life, whichever is less.
  4. Contact
    Borrowers must use a local FHA-approved lending institution. If additional information is needed, contact a HUD Field Office
    or
    Office of Multifamily Development
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-0624
    http://www.hud.gov/groups/multifamily.cfm
7. Property Improvement Loan Insurance for Improving All Existing Structures and Building of New Nonresidential Structures (CFDA 14.142)
  1. Purpose
    Under this program, the lender is insured against loss on loans for repairs, rehabilitation, and improvements that will substantially protect or improve the basic livability or use of the property. The maximum amount of the loan is $25,000 for improving a single-family dwelling or building a nonresidential structure. For improving a multifamily structure, the maximum loan amount is $12,000 per unit, not to exceed a total of $60,000.
  2. Eligibility
    Eligible borrowers include the owner of the property to be improved, a lessee having a lease extending at least six months beyond maturity of the loan, or a purchaser of the property under a land installment contract.
  3. Terms
    Loans may be for terms up to 20 years and 32 days. Loans may be refinanced but may not extend beyond 30 years from the date of the original note.
  4. Contact
    U.S. Department of Housing and Urban Development
    1-800-767-7468
    http://www.hud.gov/progdesc/title-i.cfm
8. Mortgage Insurance – Combination and Manufactured Home Lot Loans (CFDA 14.162)
  1. Purpose
    Insured loans under this program may be used to purchase manufactured homes and lots for buyers intending to use them as their principal place of residence.
  2. Eligibility
    This program has no income limits; all persons are eligible to apply.
  3. Terms
    The maximum mortgage amount is $64,800 for a manufactured home and a suitably developed lot or $16,200 for a developed lot only. Maximum loan limits may be increased in designated high-cost areas. The lot must be appraised by a HUD-approved appraiser. The maximum loan term is 20 years for a single module home and lot, 25 years for a multiple module home and lot, and 15 years for a lot only.
  4. Comment
    The interest rate is negotiated between the borrower and lender.
  5. Contact
    Borrowers must use a local FHA-approved lending institution. For more information, contact a HUD Field Office
    or
    Mortgage Insurance Division
    U.S. Department of Housing and Urban Development
    Room 9272
    451 Seventh St., S.W.
    Washington DC, 20410
    202-708-2121
    http://www.hud.gov/progdesc/manuf14.cfm
9. Housing Counseling Assistance Program (CFDA 14.169)
  1. Purpose
    This is not a housing development program but provides grant funds to HUD-approved housing counseling agencies to counsel homeowners, home buyers, prospective renters, and tenants under HUD and other programs and in conventionally financed homes. Counseling is to assure successful homeownership or tenancy and prevent delinquencies, defaults, foreclosures, and other losses.
  2. Eligibility
    Agencies applying for a HUD housing counseling grant must first become HUD-approved counseling agencies. An applicant agency must be a national, regional, or multi-state intermediary or a state housing finance agency.
  3. Terms
    Agencies applying for counseling funding must have ongoing housing counseling programs. Funding assistance is usually for one year.
  4. Comments
    Counseling services should be provided by the agency free of charge, with emphasis on low- and moderate-income families in HUD housing. Generally, the most frequent service provided is mortgage default counseling, followed by rental delinquency and pre- and post-occupancy counseling. Grantees are expected to find additional sources of counseling funding as the HUD funds can only support limited activities. Grants have ranged from $1,500 to $100,000 in prior years.
  5. Contact
    Contact the HUD Homeownership Center serving the state
    or
    a HUD Field Office
    or
    Program Support Division
    Office of Insured Single Family Housing
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-0317
    http://www.hud.gov/progdesc/snglindx.cfm
10. Housing for the Elderly (Section 202) (CFDA 14.157)
  1. Purpose
    The Section 202 program provides capital grants to private nonprofit sponsors and consumer cooperatives for the construction or substantial rehabilitation of residential projects and related facilities for elderly persons, which may include the cost of real property acquisition, site improvement, conversion, demolition, relocation, and other expenses of supportive housing for elderly persons.
  2. Eligibility
    1. Applicant. Private nonprofit corporations and consumer cooperatives may participate in this program. Public bodies and their instrumentalities are not eligible Section 202 applicants.
    2. Tenant. Beneficiaries of housing developed under this program must be elderly (62 years old or older) and have very low incomes.
  3. Terms
    Section 202 projects must be available for lower-income elderly persons for 40 years. Rental assistance is provided, equal to the difference between the established rent for the dwelling unit and 30 percent of the tenant's income after allowances. Project Rental Assistance Contracts (PRACs) are used as the rent subsidy rather than Section 8. PRACs are for five years and are renewable.
  4. Comments
    Between 20 and 25 percent of Section 202 funding must be set aside for use in rural areas. HUD also provides for the development of two types of specialized housing for persons with disabilities – Independent Living Complexes and Group Homes. Potential applicants for Section 202 grants also should investigate HUD's Congregate Housing Services Program which HUD administers as a demonstration program for frail elderly persons and non-elderly persons with disabilities.
  5. Contact
    Contact a HUD Field Office
    or
    Office of Housing Assistance and Grants Administration
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-2866
    http://www.hud.gov/progdesc/multindx.cfm
11. Supportive Housing for Persons with Disabilities (Section 811) (CFDA 14.181)
  1. Purpose
    The Section 811 program provides grant funds to finance the construction or rehabilitation of supportive housing for people with disabilities, including the purchase of buildings without rehabilitation or with moderate rehabilitation for use as group homes.
  2. Eligibility
    1. Applicant. Private nonprofit corporations with Section 501(c)(3) tax-exempt status are eligible for Section 811 grants.
    2. Tenant. This program is for very low-income, physically disabled, developmentally disabled or chronically mentally ill persons, 18 years of age or older.
  3. Terms
    The project must stay available for very low-income persons with disabilities for 40 years or funds used to capitalize the project must be repaid. Rental assistance is provided, equal to the difference between the established rent for the dwelling unit and 30 percent of the tenant's income after allowances. Project Rental Assistance Contracts (PRACs) are used as the rent subsidy rather than Section 8. PRACs are for five years and are renewable.
  4. Contact Contact a HUD Field Office
    or
    Office of Housing Assistance and Grants Administration
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-2866
    http://www.hud.gov/progdesc/multindx.html
12. Demolition and Revitalization of Severely Distressed Public Housing (HOPE VI) (CFDA 14.866)
  1. Purpose
    This program provides grants that enable PHAs to amend the living environment for public housing residents of severely distressed public housing projects. The grants can be used for demolition, substantial rehabilitation, reconfiguration, and/or replacement of severely distressed units; to revitalize the sites where severely distressed public housing is located and contribute to the upgrading of the surrounding neighborhood; to lessen isolation and reduce the concentration of low-income families; to build sustainable mixed-income communities; and to provide well-coordinated, results-based community and supportive services that directly complement housing redevelopment and that help residents to achieve self-sufficiency, young people to attain educational excellence, and the community to secure a desirable quality of life.
  2. Eligibility
    PHAs operating public housing units are eligible. Indian Housing Authorities and PHAs that only administer the Section 8 program are not eligible to apply.
  3. Terms
    Grantees must provide a 5 percent overall match and, if more than 5 percent of the grant is used for community and supportive services, any amount over that 5 percent must be matched.
  4. Comment
    A total of five HOPE programs have been created. The first three use or used existing stocks of public and Indian housing (HOPE I), multifamily housing (HOPE II), and single-family housing (HOPE III) to provide low-income homeownership opportunities. HOPE IV helps low-income elderly persons live independently by combining Section 8 rental assistance with case management and support services. Although the HOPE II and HOPE IV programs are still active, planning grants are no longer available, leaving HOPE VI as the most funded and accessible program.
  5. Contact
    Assistant Secretary for Public and Indian Housing
    Deputy Assistant Secretary for Public Housing Investments
    Office of Urban Revitalization
    U.S. Department of Housing and Urban Development
    451 Seventh St., S.W.
    Washington, DC 20410
    202-708-2822
    http://www.hud.gov/progdesc/pihindx.cfm
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