HOME-eligible Hard Costs

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The HOME regulations allow HOME funds to be used for a variety of project-related hard costs. The following list defines the types of hard costs that are eligible for HOME funding.

New construction. Any project that includes the addition of dwelling units outside the existing walls of a structure is considered new construction for HOME Program purposes.

	Rehabilitation. Rehabilitation includes the alteration, improvement, or modification of an existing structure. It also includes moving an existing structure to a foundation constructed with HOME funds. Rehabilitation may include adding rooms outside the existing walls of a structure, however, adding a housing unit is considered new construction.
	Reconstruction. Reconstruction refers to rebuilding a structure on the same lot where housing is standing at the time of project commitment. HOME funds may be used to build a new foundation or repair an existing foundation. Reconstruction also includes replacing a substandard manufactured house with a new manufactured house. During reconstruction, the number of rooms per unit may change, but the number of units may not.
	Conversion. Conversion of an existing structure from another use to affordable residential housing is usually classified as rehabilitation. If conversion involves additional units beyond the walls (envelope) of an existing structure, the entire project will be deemed new construction.

Conversion of a structure to commercial use is prohibited under HOME.

Site improvements. Site improvements must be in keeping with improvements to surrounding standard projects. They include new, on-site improvements (sidewalks, utility connections, sewer and water lines, etc.) where none are present. They must be essential to development or repair of existing improvements. Building new, off-site utility connections to an adjacent street is also eligible.

Off-site infrastructure is not eligible as a HOME expense, but may be eligible for match credit under the HOME Program.

Example: Infrastructure, such as sewer and water lines in a public street in front of a HOME-assisted property, cannot be paid for with HOME funds. However, the connections that run from the HOME-assisted property to the street are eligible HOME costs since they are essential to the property.

Acquisition of property. Acquisition of existing standard property, or substandard property in need of rehabilitation, is eligible as part of either a homebuyer program or a rental housing project.

Land banking is prohibited under HOME

Demolition. Demolition of an existing structure may be funded with HOME funds only if construction will begin on the HOME project within 12 months.