HOMEfires - Vol. 3 No. 4, March 2001
Are back taxes, fees or charges an eligible project soft cost for
a project being acquired or rehabilitated with HOME funds?
A: HOME funds may not be used to pay for delinquent taxes
levied on a property that will receive HOME assistance.
Delinquent property taxes, construction liens and similar encumbrances
are obligations incurred by the property owner prior to the purchase
or rehabilitation of the property with HOME funds, rather than costs
associated with the acquisition or rehabilitation of the property.
In an acquisition, the seller may use the proceeds of a HOME assisted
purchase to satisfy these liens and deliver clear title to the purchaser.
However, the purchase price may not be artificially inflated (i.e.,
above fair market value) so that proceeds will be available to pay