Sec. 05.12.01.07. Eligible Costs

HOME funds may be used to pay any costs permitted by 24 CFR Part 92. HOME funds generally may be used to pay for the following costs:

A. The actual hard costs of new construction, including the costs of complying with Regulation .14 of this chapter;

B. Rehabilitation hard costs to meet the property standards for rehabilitation projects in Regulation .14 of this chapter;

C. The cost of refinancing existing debt secured by housing that is being rehabilitated with HOME funds:

(1) For single-family (one-to-four family) owner-occupied housing, if the overall housing costs of the sponsor will be reduced and made more affordable and if the rehabilitation cost is greater than the amount of debt that is refinanced; and

(2) For rental housing development projects, when lending HOME funds to rehabilitate the units if refinancing is necessary to permit or continue affordability;

D. Site improvements of a type and quality in keeping with standard improvements in the area;

E. Utility connections;

F. Acquisition costs of improved real property;

G. Cost of acquiring vacant land or the cost of demolishing improvements as permitted in 24 CFR §92.205;

H. Reasonable and necessary soft costs related to the development of the project such as:

(1) Architectural, engineering, and related professional fees incurred not more than 24 months before the HOME funds were committed to the project;

(2) Financing and processing fees paid to lenders other than the Department;

(3) Appraisal and market study fees;

(4) Builders' and developers' fees;

(5) Building permit;

(6) Legal fees paid to lenders other than the Department;

(7) Project audit fees;

(8) Marketing costs including affirmative fair housing information;

(9) For new construction or rehabilitation of a rental housing development project, the cost of funding an initial operating deficit reserve to meet shortfalls in project income during an initial rent-up period of up to 18 months, provided that unexpended funds are returned to the HOME Investment Trust Fund; and

(10) For new construction or rehabilitation, costs for the payment of impact fees that are charged for all projects within a jurisdiction;

I. Costs of relocation payments or assistance; and

J. Operating expenses of CHDOs, if the Department does not:

(1) Use more than 5 percent of the Department's fiscal year HOME allocation for these expenses, which 5 percent may not be included within the Department's minimum CHDO set aside of 15 percent, as set forth in Regulation .09B(1) of this chapter, and

(2) Fund, in any fiscal year, more than the greater of 50 percent of, or $50,000 towards, the total operating expenses of a CHDO, including funds for organizational support, housing education, and operating expenses provided under 24 CFR §92.208.