Compliance for HOME Rental/HTF Housing Programs

Grants Management is the division responsible for monitoring the long-term compliance of MHC-funded rental properties assisted with HOME Program (HOME) or Housing Trust Fund (HTF). The Grants Management staff monitors compliance with these programs through a review of annual reports and periodic on-site visits to assisted properties. These on-site visits consist of a file review and physical inspection of a percentage of assisted units.

Many long-term compliance related questions can be answered by referring to the MHC HOME Rental & HTF Compliance Manual (2024) (available under Documents & Links).

PERIOD OF AFFORDABILITY

The length of time for which a project must continue to remain in program compliance and meet its specified requirements (as outlined in the application and regulatory agreement) is called the affordability period.

The affordability period begins after project completion. Project completion is defined as the date that:

All necessary title transfer requirements and construction work have been performed;
The rehabilitation completed complies with the requirements of 24 CFR 92.2, the property standards of 24 CFR 93.301, and the stricter of the local rehabilitation standards or the International Building Code;
The final drawdown has been disbursed for the project; and
The project completion information has been entered into the disbursement and information system (IDIS) established by HUD.

The following chart defines the affordability periods that apply to HOME rental projects. The affordability period for HTF-assisted units is always 30 years, regardless of the amount of assistance per unit:

ANNUAL REPORTS

Annual Reports are required for all rental properties assisted with HOME and/or HTF funds allocated by MHC. These reports are due annually for the preceding fiscal year. Required documents for HOME and HTF annual reports include the HOME/HTF Annual Compliance Report, Rental Schedule for Assisted Units, and Project Contact Sheet. Multiple projects require completion of separate reports.

For projects assisted with both HOME and HTF funds, forms for both programs must be submitted. Currently, compliance monitoring fees are not required for HOME and HTF properties.

ON-SITE PHYSICAL INSPECTIONS

During the required period of affordability, as imposed by the Regulatory Agreement, projects must be inspected regularly to ensure that they continue to meet or exceed applicable property standards. MHC performs on-site inspections of HOME/HTF assisted rental properties to determine compliance with the Uniform Physical Conditions Standards (UPCS) or the National Standards for the Physical Inspection of Real Estate (NSPIRE, beginning 10/1/2025) and local code requirements at least once every three years. The monitoring and inspection sample size will be determined as follows:

For projects with one to four assisted units, 100% of the assisted units will be monitored/inspected.
For projects with more than four assisted units, at least 20% of the assisted units, but no fewer than four units, will be monitored/inspected. For physical inspections, at least one assisted unit in each building will be inspected.

LONG-TERM COMPLIANCE MONITORING

Monitoring is designed to assist award recipients with federal, state, and local regulations regarding MHC’s compliance monitoring requirements and procedures in accordance with 24 CFR Part 91, 24 CFR Part 92, and 24 CFR Part 93. Remaining in compliance is solely the responsibility of the Owner and is necessary to use and retain the funds allocated to the award.

Monitoring each development is an ongoing activity that extends throughout the affordability period. MHC is required by regulations to conduct this compliance monitoring and to take the appropriate steps when noncompliance is found.

MHC will monitor various program requirements, including but not limited to the following:

Property inspections
Financial review
Income eligibility
Affordability and income targeting
Lease with tenant protections
Emergency transfers (VAWA)

OTHER REPORTING REQUIREMENTS

Owners are required to report quarterly during the development phase and lease up phase. Quarterly reports will be due on the 5^th of the month following the end of the prior quarter.

Due Dates:

April 5^th – reflecting the Project period January, February, March
July 5^th – reflecting the Project period April, May, June
October 5^th – reflecting the Project period July, August, September
January 5^th – reflecting the Project period October, November, December

Furthermore, during the construction phase, owners must provide Section 3 and MBE/WBE quarterly reports. If necessary, owners must provide monthly reports detailing construction progress and barriers to progress, copies of invoices being paid, and evidence of appropriate lien waivers.

Owners of HOME- or HTF-assisted projects with 10 or more units (total units, not assisted units) must annually submit property financials for MHC review. The Owner’s latest completed audited financials must be submitted with the annual report.