Fiscal Note
The City’s Deferred Payment Loan (DPL) program has a current available balance of roughly $49,548 in HOME funds, and the City’s “Home Buy the American Dream” (HBAD) program has a current available balance of roughly $25,823 in HOME funds. The CDD Housing Development Reserve fund has an available balance of over $781,000 in CDBG funds. This Resolution proposes to exchange up to $75,371 in HOME funds from the DPL and HBAD programs for a commensurate amount of CDBG funds from the Housing Development Reserve.
No additional City funds are being requested by this Resolution, and there is no impact on the local City levy.
Title
Approving the exchange of HOME funds for CDBG funds between two City of Madison loan programs (DPL/HBAD) and the CDD Housing Development Reserve Fund in order to better align these two HUD funding sources with appropriate projects and expenditures, in light of recent HUD regulation changes regarding the use of HOME funds.
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BACKGROUND
Among the loan programs administered by the City’s Community Development Division (CDD) are two that have historically been funded, in whole or in part, with federal HOME funds.
The Deferred Payment Loan (DPL) program provides residential rehab loans targeted to Madison homeowners with income levels at or below 80% of the Area Median income, while the “Home Buy the American Dream” (HBAD) program - formerly known as “American Dream Downpayment Initiative” (ADDI) - provides loans of up to $10,000 to assist eligible Madison homebuyers with downpayment and closing costs. All loan repayments are returned to their program of origin, and in turn, are used to fund additional loans. To date, the DPL program has been funded with a combination of HOME and CDBG funds, and the ADDI program (now HBAD) has been funded with HOME funds.
Recently, HUD implemented its new HOME Rule, which incorporated regulatory changes that now make the use of federal HOME funds far more attractive for investments in larger hou...
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