[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR954.303]

[Page 422-423]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 954_INDIAN HOME PROGRAM--Table of Contents
 
             Subpart C_Eligible Activities and Affordability
 
Sec. 954.303  Eligible project costs.

    HOME funds may be used to pay the following eligible costs:
    (a) Development hard costs. The actual cost of constructing or 
rehabilitating housing. These costs include the following:

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    (1) For new construction, costs to meet the applicable new 
construction standards of the grantee and the Model Energy Code referred 
to in Sec. 954.401;
    (2) For rehabilitation, costs:
    (i) To meet the applicable rehabilitation standards of the grantee 
or correcting substandard conditions (minimally, the housing quality 
standards at Sec. 882.109 of this title), to make essential 
improvements including energy-related repairs or improvements, 
improvements necessary to permit the use by handicapped persons, and the 
abatement of lead-based paint hazards, as required by Sec. 954.4, and 
to repair or replace major housing systems in danger of failure; and
    (ii) To refinance existing debt secured by a single-family owner-
occupied unit when loaning HOME funds to rehabilitate the unit, if the 
overall housing costs of the borrower will be reduced and made more 
affordable.
    (3) For both new construction and rehabilitation, costs to demolish 
existing structures and for improvements to the project site that are in 
keeping with improvements of surrounding, standard projects, and costs 
to make utility connections. The ``site'' of the improvements may 
include property adjacent to or near the immediate site of the housing 
if this property and the housing are owned by the same entity (e.g., the 
housing is owned--at least until sold to homebuyers--by the grantee and 
the housing and the improvements are located on a reservation). If the 
site improvements will benefit other housing (existing or future) in 
addition to housing assisted with the particular Indian HOME grant, only 
a pro-rated share of the site improvements may be charged against the 
HOME grant. Site improvements include roads, streets, sidewalks, curbs, 
gutters, and connections to utilities, such as storm and sanitary 
sewers, water supply, gas, and electricity, and the pro rata development 
cost of facilities for water supply and sewerage collection utilities.
    (4) For new construction or substantial rehabilitation (an 
expenditure of $25,000 or more per home) the cost of funding an initial 
operating deficit reserve, which is a reserve to meet any shortfall in 
project income during the period of project rent-up (not to exceed 18 
months) and which may only be used to pay operating expenses, reserve 
for replacement payments, and debt service. Any HOME funds placed in an 
operating deficit reserve that remain unexpended when the reserve 
terminates must be returned to the grantee's account and shall be 
reprogrammed for other activities eligible under this part or returned 
to HUD promptly.
    (b) Acquisition costs. Costs of acquiring improved or unimproved 
real property, including acquisition by homebuyers.
    (c) Related soft costs. Other reasonable and necessary costs 
incurred by the owner and associated with the financing, or development 
(or both) of new construction, rehabilitation or acquisition of housing 
assisted with HOME funds. These costs include, but are not limited to:
    (1) Architectural, engineering or related professional services 
required to prepare plans, drawings, specifications, or work write-ups;
    (2) Costs to process and settle the financing for a project, such as 
private lender origination fees, credit reports, fees for title 
evidence, fees for recordation and filing of legal documents, building 
permits, attorneys' fees, private appraisal fees and fees for an 
independent cost estimate, builder and developer fees;
    (3) Costs of a project audit that the grantee may require with 
respect to the development of a specific project; and
    (4) Costs to pay impact fees that are charged to all housing.
    (d) Relocation costs. Costs of relocation payments and other 
relocation assistance for permanently and temporarily relocated 
individuals, families, businesses, private nonprofit organizations, and 
farm operations where assistance is required under Sec. 954.4 or 
determined by the grantee to be appropriate under Sec. 954.4.
    (e) Costs related to tenant-based rental assistance. Eligible costs 
are the rental assistance and security deposit payments made to provide 
tenant-based rental assistance for a family.

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