[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR954.303]



[Page 417-418]

 

                 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:

    (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



[[Page 418]]



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.