(c) Housing Assistance Council, July 1998

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OBSERVATIONS

Because the HOME program is flexible, it holds the promise of meeting a variety of significant rural housing needs in regions throughout the United States. The program is structured so that local solutions to local problems may receive the funding needed, and leverage private financing to carry projects through to completion. While rural areas in many states are underserved by the program, some states, such as the four profiled in this report, have made concerted efforts to direct HOME program resources to meeting rural housing needs.

While HOME activity is close to the rural-urban distribution of population and occupied housing units, rural areas receive a somewhat smaller percentage of HOME funds than their share of population and housing units. In addition, rural counties have received less HOME funding and fewer HOME-assisted units than urban counties relative to their percentage of the poverty population and substandard housing units. Rural counties, especially the remote rural counties with less than 2,500 urban population, also have higher poverty and substandard housing rates than urban counties.

Areas outside the jurisdiction of local PJs must access the HOME program through state PJs. State PJs, however, have awarded a large proportion of their funds (42.7 percent) to projects within the most populous of urban counties (Beale county codes 0, 1 and 2), many of which have local PJs with their own HOME allocations. Housing groups in urban areas thus have two sources of HOME they may access to fund projects, whereas rural housing organizations must compete for a single, smaller source of HOME to support their activities.

Housing organizations in many rural areas often do not have the expertise or funding to compete successfully for HOME funds. Projects pursued in rural areas have a number of challenges that may make them more costly, such as serving small groups of clients scattered throughout the open countryside. These and other considerations have often made it difficult for rural groups to take advantage of HOME.

Given that nonprofits play a strong role in rural areas, especially in remote rural counties, program changes at the state or federal levels which make HOME more accessible to nonprofits and CHDOs will likely improve the use of HOME in high poverty remote rural counties.

The case studies highlight some features in common among states that have awarded a large portion of their HOME funds to rural areas. In each of the states profiled in this report, rural housing organizations have established some form of network through which they express their needs and interests to the state. These networks also provide a forum for sharing ideas, increasing expertise, and developing cooperative partnerships. Each of the states with large rural HOME awards also has a state PJ that has been attentive to the housing needs of high poverty rural areas. In most cases, this has meant establishing formal mechanisms for local organizations to provide meaningful feedback concerning the application process and program implementation.

Generally, these states have also invested significant funds and staff resources in providing technical assistance and outreach services to rural nonprofits. Each of the CHDOs profiled in the case studies had access to capacity building funds or technical assistance services, either from the state or from other sources. Since many rural areas have more limited housing development resources than is the case in urban environments, capacity building investments enable rural affordable housing organizations to more successfully access and use HOME for rural housing initiatives. Additionally, case study states either currently use or are in the process of developing streamlined application processes in order to make applying for HOME simpler, and to increase the program’s ease of use with other state affordable housing development programs.

Success in targeting HOME to meet rural housing need thus appears to improve with outreach and cooperation between state agencies and the local housing groups that serve remote rural areas of the country.