In rental housing development projects, HOME funds typically serve as "gap financing" - funds provided when the contributions of private lenders and other funding resources are not sufficient to cover the cost of developing and operating the project. PJ and non-profit staff are often called upon to determine the appropriate amount of HOME funds required to "fill the gap" in order to make the project feasible, while ensuring the project is not over-subsidized and that HOME funds are used only for HOME-eligible expenses.

While HOME funds are an indispensable resource for many affordable housing projects, the HOME Program also includes requirements that can impact a project's financial health. To ensure that a portion of housing units created with HOME funds remain available to low-income and very-low-income households, rents for these units are limited to levels appropriate for specific geographic areas. These HOME rent limits may influence the amount of income generated by the property, which in turn can influence the amount and availability of private and other public funding resources for the project.

If you would like learn more about general HOME Program activities and requirements, click here to explore other HOME Front training modules. To proceed with this training, return to the Underwriting Overview page.