HOMEfires - Vol. 1 No. 10, December 1, 1998

Q: How will the recently passed Quality Housing and Work Responsibility Act of 1998 affect income eligibility requirements for participants in HOME-funded lease-purchase housing programs?

A:Section 599B of the Quality Housing and Work Responsibility Act of 1998 amends Title II, Section 214(2) of the Cranston-Gonzalez National Affordable Housing Act by striking "at the time of occupancy, or at the time funds are invested, whichever is later," from the statute. The Act removes the provision that HOME-assisted homebuyers must requalify as income eligible at the time of occupancy or when the HOME funds are invested whichever is later. The new language reiterates the current language for existing housing but establishes a new standard for lease-purchase or contract-to-purchase housing to be constructed for qualifying HOME-assisted homebuyers as income eligible:

1. In the case of a contract to purchase existing housing, at the time of purchase;
   
   
2. In the case of a lease-purchase agreement for existing housing or for housing to be constructed, at the time the agreement is signed; or
   
   
3. In the case of a contract to purchase housing to be constructed, at the time the contract is signed.
   

While the amendment is effective as of October 21, 1998, the Department will amend the HOME regulation regarding these provisions, 24 CFR 92.254 (a)(7) (http://edocket.access.gpo.gov/cfr_2004/aprqtr/24cfr92.254.htm), to be consistent with this statute.

With this amendment to the HOME Program, participating jurisdictions will no longer have to disqualify homebuyers on the basis of income during an extended lease-purchase or construction contract period. On a number of occasions, families who had originally qualified for HOME assistance subsequently became ineligible due to a family member finding work, or an already-employed family member receiving a raise in wages. Months of hard work that had gone into acquiring and/or rehabilitating property, as well as preparing the family to assume the responsibility of homeownership were for naught, in addition to penalizing families for making any forward economic progress. The amended language ensures that assistance goes to those who need it at the time they apply, as well as ensuring that months of hard work on the part of the PJ and the homebuyer are neither wasted nor penalized.