HOME Rental Development

Federally assisted projects are subject to a variety of environmental requirements. Therefore, an environmental review (ER) must be submitted to the Environmental Impact Officer within four (4) months of receiving a reservation of HOME funds letter.

Applicants should be familiar with these requirements and are strongly encouraged to discuss any questions they have with the Environmental Impact Officer before entering into a purchase agreement or submitting an application.

All HOME-assisted projects shall be implemented under environmental review regulations as defined in 24 CFR Part 58. For guided training, see the WISER modules on HUD Exchange.

Every effort will be made to avoid the permanent displacement of all persons due to a HOME-funded project. MHC reserves the right to reject any application that fails to minimize the permanent displacement of tenants. If temporary relocation or permanent displacement is necessary, MHC will comply and will require compliance by owners with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) and Section 104(d).

All rental housing projects fall under the requirements of the URA. Applicants must further document that any purchase of property meets the requirements of URA, including the provision of notices to the seller identifying the transaction as a voluntary sale not under the threat of eminent domain.

Additionally, for properties occupied by commercial or residential tenants at the time of application, URA requires certain notices to tenants in place as of the application for federal funds. Failure to provide such notices may result in substantial compliance costs or render a project ineligible. To ensure compliance with URA, applicants should consult the Grants Management staff before the submission of any application involving an occupied property to understand the requirements of URA.

For more information regarding URA, click here.

The Davis-Bacon and Related Acts (DBRA) apply to HOME-funded construction projects with 12 or more HOME-assisted units. The DBRA include the following:

1. The Davis-Bacon Act (DBA): Requires the payment of prevailing wage rates, as determined by the U.S. Department of Labor, to all laborers and mechanics. Construction includes alteration and repair, including painting and decorating, of public buildings or public works.
2. The Contract Work Hours and Safety Standards Act (CWHSSA): Requires time and a half pay for overtime hours worked in excess of 40 in any workweek on a covered project. Applies to all federally-assisted contracts of $100,000 or more, except where the assistance is a loan guarantee or insurance.
3. The Copeland Act (Anti-Kickback Act): Makes it a federal crime for any employer on a federally-assisted project to “kickback” any part of their wages, and requires employers to submit weekly certified payrolls, in addition to regulating permissible deductions.
4. The Fair Labor Standards Act (FLSA): Contains federal minimum wage rates, overtime and child labor requirements, which generally apply to any labor performed. MHC will
   • Review bids, contracts, and subcontracts for labor standards clauses and correct wage determination(s).
   • Submit requests for additional wage classifications and wage rates.
   • Provide contractor training regarding responsibilities for labor standards compliance.
   • Review weekly certified payrolls for compliance and ensure employees are paid the correct wage rate.
   • Conduct periodic employee interviews on site and verify payroll data to ensure employees are paid appropriate wages.
   • Ensure Davis Bacon posters and wage determinations are posted on-site.
   • Identify violations and enforce compliance with DBRA regulations.
   • Report enforcement activities to the Department of Labor.

For more information regarding labor standards, click here.

Developers must maintain an MBE/WBE plan that demonstrates marketing and solicitation of MBE/WBE businesses and contractors for the construction of the project. Contracts awarded and payments made to MBE/WBE businesses and contractors must be reported quarterly during the construction phase.

For more information regarding MBE/WBE, click here.

Owners and developers of construction projects exceeding $200,000 in aggregate HUD funding (including HOME or HTF as well as HOME, CDBG, or other similar funding from a local government) are subject to the requirements of Section 3 of the Housing and Community Development Act of 1968 as outlined in 24 CFR 75. The purpose of Section 3 is to provide economic opportunities, particularly employment, generated by HUD-assisted development activity to low- and very low-income persons. In practice, MHC expects that all HOME/NHTF projects will be subject to Section 3.

Projects subject to Section 3 are required to take steps to achieve HUD-specified benchmarks (and maintain records and provide reporting) on total labor hours worked including by eligible “Section 3 workers” (25% of total labor hours) and by “Targeted Section 3 workers” (5% of total labor hours). More information is available on the HUD Exchange’s Section 3 page (Section 3 - HUD Exchange). The Section 3 report must be submitted quarterly during the construction phase.

The Build America, Buy America Act (BABA) requires that all iron, steel, manufactured products, and construction materials used for federally funded infrastructure projects are produced in the United States, unless otherwise exempt or subject to an approved waiver. This requirement is known as the “Buy America Preference (BAP)” and the specific requirements are codified in 2 CFR 184. BAP will apply to all HOME rental projects committed with HUD funds appropriated on or after August 23, 2024.

Products covered under the BAP include:

1. Iron and steel: The cost of the iron and steel content exceeds 50% of the total cost of all the item’s components. All manufacturing processes, starting from the initial melting stage and continuing through the application of coatings, must occur in the United States.
2. Construction materials: All manufacturing processes for the construction material must occur in the United States.
   • Specifically Listed Construction Materials: Items include (1) non-ferrous metals; (2) lumber; and (3) plastic- and polymer-based composite building materials, pipe, and tube.
   • Not Listed Construction Materials: Items include (1) all other plastic- and polymer-based materials (such as polymers used in fiber optic cables), (2) glass, (3) fiber optic cable, (4) optical fiber, (5) engineered wood, and (6) drywall.
3. Manufactured products: Manufactured products must meet two production requirements. First, the final product must be manufactured in the United States. Second, at least 55% of the cost of the components making up the manufactured product must be associated with components that were mined, produced, or manufactured in the United States. Includes articles, materials, or supplies that have either been:
   • Processed into a specific form or shape, or
   • Combined with other articles, materials, or supplies to create a product with different properties than the individual articles, materials, or supplies.

Products should be classified into just one of these categories. The classification must be made based on the product’s status when brought to the work site.

BABA Waivers

HUD has defined two types of BABA waivers:

1. General Waivers - Public Interest waivers granted at the departmental level that apply to all HUD-funded projects that meet the waiver criteria.

HUD general waivers offer flexibility to all HUD-funded infrastructure projects and should be carefully considered before pursuing a project-specific waiver. No formal request to HUD is needed to use these waivers. Applicants should maintain documentation that demonstrates the applicability of the waiver to a project, consistent with program regulations, and inform MHC that they intend to utilize a specific general waiver.

HUD currently has five general waivers available:

• • Exigent Circumstances Waiver: The BAP may be waived if projects must be completed immediately to protect life, ensure safety, or prevent the destruction of property. Expires November 23, 2027.
  • Tribal Recipients Waiver: For awards on or after January 10, 2025: BABA does not apply to awards and subawards to Tribes of $2.5 million or less. Expires January 10, 2030. Waiver for all manufactured products for Tribes. Expires September 30, 2026.
  • Pacific Island Territories Waiver: The BAP is currently waived for all Federal financial assistance for infrastructure projects in the Northern Mariana Islands, American Samoa, and Guam. Expires January 10, 2030. Exceptions for some critical supply chains.
  • Small Grants Waiver: The BAP can be waived for an entire project if the total project cost (including all sources of funding) is $250,000 or less. Expires November 23, 2027.
  • De Minimis Waiver: If none of the other general waivers apply to a project, the de minimis waiver gives grantees additional flexibility to waive the BAP for a portion of a project. The de minimis waiver allows grantees to waive the BAP for materials whose total cost is less than 5% of all materials used in a project (up to $1,000,000).
    • The total cost of materials includes all iron and steel, construction materials, and manufactured products, regardless of where the project falls in HUD's phased implementation. Example: $500,000 (total cost of (total cost ofÞmaterials) x 5% = $25,000 De Minimis limit
    • If a grantee has a particular product(s) that is below the de minimis limit and no domestically produced equivalent is available, the BAP can be waived for that product(s) only.
    • The BAP will still apply to the rest of the materials used in the project.

2. Project-/Product-Specific Waivers - Targeted waivers that individual grantees may apply for. Applied to a specific project or a specific product(s) used in a project.

Before applying for a project-/product-specific waiver, the Applicant must confirm that the project is subject to the BAP; no general waivers apply to the project; the products for which you need a waiver exceed the de minimis limit; complete market research to attempt to locate domestic made equivalents for products that exceed the de minimis limit (NIST MEP supplier scouting); and submit the waiver application as early as possible and before funds have been spent on the project, if possible (OMB Made in America Office (MIAO) will not approve retroactive waivers for items that have already been purchased).

Only the direct recipient of Federal funding (MHC) can submit a waiver application. Applicants should coordinate with MHC for waiver submission.

HUD has defined three types of project-/product-specific waivers:

• Non-availability: No domestic product is available.
• Unreasonable Cost: Inclusion of a domestically produced product would increase the cost of the overall project by more than 25%.
• Public Interest: Complying with BABA would be inconsistent with the public interest.

The waiver process is anticipated to take a minimum of 6-8 weeks to complete.

• Complete 6-step analysis (Applicant).
• Complete online waiver application (MHC).
• Waiver application is reviewed by HUD. HUD may request additional supporting information.
• If approved by HUD, waiver is sent to OMB MIAO for review, including a 15-day public comment period.
• OMB MIAO will issue final decision, which HUD will communicate to MHC.

Minimum Documentation Requirements

1. Determination of BAP applicability to the project - Even if the project is determined to be exempt, documentation should be retained in the grant files. The Optional BAP Applicability Checklist posted to HUD Exchange can assist with documentation.
2. If a project is subject to the BAP, documentation that all Covered Materials subject to the BAP were procured from BABA-compliant sources.
3. If a general waiver was applied to the project, documentation that supports that the project meets the conditions of the waiver.
4. If a project-/product-specific waiver was obtained for the project, a copy of the approved waiver and market research supporting the need for the waiver.

For more information regarding the BAP, click here.

The following Federal nondiscrimination and equal opportunity guidelines apply to all Rental Housing projects and affect both the development and operation of assisted housing:

1. The requirements of the Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR Part 100; Executive Order 11063, as amended by Executive Order 12259 (3 CFR 1958 B1963 Comp., P. 652 and 3 CFR 1980 Comp., P. 307) (Equal Opportunity in Housing) and implementing regulations at 24 CFR Part 107; and of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (Nondiscrimination in Federally Assisted Programs) and implementing regulations issued at 24 CFR Part 1.
2. The prohibition against discrimination based on age under the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and implementing Regulations at 24 CFR Part 146.
3. The requirements of Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR Part 8.
4. The requirements of Executive Order 11246, as amended by Executive Orders 11375, 11478, 12086, and 12107 (3 CFR 1964-65, Comp., p. 339) (Equal Employment Opportunity) and the implementing regulations issued at 41 CFR Chapter 60.
5. The requirements of 24 CFR 5.105(a)(2) requiring that HUD-assisted housing be made available without regard to actual or perceived sexual orientation, gender identity, or marital status and prohibiting subrecipients, owners, developers, or their 1. agents from inquiring about the sexual orientation or gender identity of an applicant for, or occupant of, HUD-assisted housing to determine eligibility for the housing or otherwise make such housing available. This prohibition on inquiries regarding sexual orientation or gender identity does not prohibit any individual from voluntarily self-identifying sexual orientation or gender identity.

For more resources, click here.

HOME-assisted projects must comply with the requirements of the Violence Against Women Act (VAWA) as required by 24 CFR 92. VAWA provides certain additional tenant protections to applicants and tenants who are victims of domestic violence, sexual assault, and/or stalking. In general, among other requirements owners must provide notices to all tenants of the VAWA provisions, may not deny an application, or terminate or refuse to renew a lease because of a person’s status as a victim or based on criminal activity related to such status, and must allow for the bifurcation of a lease to evict the perpetrator of such criminal activity while allowing the victim to maintain occupancy.

For more information regarding VAWA, click here.

Recipients of federal financial assistance, including HOME funds, are required to provide meaningful access to their programs and services for persons with limited English proficiency (LEP). The U.S. Supreme Court has held that failing to take reasonable steps to ensure meaningful access for LEP persons is a form of national origin discrimination prohibited by Title VI of the Civil Rights Act of 1964.

Recipients of HOME funds should develop, and periodically update, a written LEP plan that describes their language assistance services and explains how staff and LEP people can access those services. Guidance regarding LEP compliance can be accessed on the HUD website here.

MHC will not fund projects owned, developed, or otherwise sponsored by any individual, corporation, or other entity that is suspended, debarred, or otherwise precluded from receiving federal awards. Furthermore, the owner may not contract with any other entity (including but not limited to builders/general contractors, property management companies, or other members of the development team) that is suspended, debarred, or otherwise so precluded. Similarly, the general contractor will be required to determine that subcontractors are not so precluded (www.sam.gov).