[Code of Federal Regulations]
[Title 24, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR92.602]

[Page 638-639]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
PART 92_HOME INVESTMENT PARTNERSHIPS PROGRAM--Table of Contents
 
             Subpart M_American Dream Downpayment Initiative
 
Sec. 92.602  Eligible activities.

    (a) Eligible activities. ADDI funds may only be used for:
    (1) Downpayment assistance towards the purchase of single family 
housing by low-income families who are first-time homebuyers; and
    (2) Rehabilitation that is completed in conjunction with the home 
purchase

[[Page 639]]

assisted with ADDI funds. The rehabilitation assisted with ADDI funds, 
including the reduction of lead paint hazards and the remediation of 
other home health hazards, must be completed within one year of the 
purchase of the home. Total rehabilitation shall not exceed 20 percent 
of the participating jurisdiction's ADDI fiscal year formula allocation. 
FY2003 ADDI funds may not be used for rehabilitation.
    (b) Eligible project costs. ADDI funds may be used for the following 
eligible costs:
    (1) Acquisition costs. The costs of acquiring single family housing.
    (2) Rehabilitation costs. The eligible development hard costs for 
rehabilitation projects described in Sec. 92.206(a) and the costs for 
reduction of lead paint hazards and the remediation of other home health 
hazards. FY2003 ADDI funds may not be used for rehabilitation.
    (3) Related soft costs. Reasonable and necessary costs incurred by 
the homebuyer or participating jurisdiction and associated with the 
financing of single family housing acquisition and rehabilitation. These 
costs include, but are not limited to:
    (i) Costs to process and settle the financing for purchase of a 
home, such as private lender origination fees, credit report fees, fees 
for title evidence, fees for recordation and filing of legal documents, 
attorneys fees, and private appraisal fees.
    (ii) Architectural, engineering, or related professional services 
required to prepare plans, drawings, specifications, or work write-ups.
    (iii) Costs to provide information services, such as fair housing 
information to prospective homeowners.
    (iv) Staff and overhead costs directly related to carrying out the 
project, such as work specifications preparation, loan processing 
inspections, and other services related to assisting a potential 
homebuyer (e.g., housing counseling), which may be charged to project 
costs only if the individual purchases single family housing with ADDI 
assistance.
    (v) Costs of environmental review and release of funds (in 
accordance with 24 CFR part 58) that are directly related to the 
project.
    (4) Ineligible costs. ADDI funds may not be used for the development 
costs (hard costs or soft costs) of new construction of housing or for 
rental assistance.
    (c) Forms of investment. A participating jurisdiction may invest 
ADDI funds as interest-bearing loans or advances, non-interest bearing 
loans or advances, interest subsidies consistent with the purposes of 
this subpart, deferred payment loans, grants, or other forms of 
assistance that HUD determines to be consistent with this subpart. Each 
participating jurisdiction has the right to establish the terms of 
assistance, subject to the requirements of this subpart.
    (d) Minimum amount of assistance. The minimum amount of ADDI funds 
in combination with HOME funds that must be invested in a project is 
$1,000.
    (e) Maximum amount of assistance. The amount of ADDI funds provided 
to any family shall not exceed the greater of six percent of the 
purchase price of the single family housing or $10,000. This limitation 
does not apply to FY2003 ADDI funds.
    (f) Limitation on subrecipients and contractors. A participating 
jurisdiction may not provide ADDI funds to an entity or organization 
that provides downpayment assistance, if the activities of that entity 
or organization are financed in whole or in part, directly or 
indirectly, by contributions, service fees, or other payments from the 
sellers of housing, whether or not made in conjunction with the sale of 
specific housing acquired with ADDI funds.