Direct
rehabilitation loans are an efficient and effective way to expand
the supply of affordable housing; they enable existing homeowners
to improve their own housing conditions and the conditions of their
neighborhood.
Many low-income homeowners need to make repairs to their property
but are unable to afford the repairs themselves or to obtain private
loans to do so.
The HOME Program enables participating jurisdictions to make direct
loans to low-income homeowners for housing rehabilitation.
This guidebook is designed to help participating jurisdictions better
understand how they may set up such programs.
Direct
loans require the participating jurisdiction to take on many roles:
that of the lender, who must underwrite and evaluate the credit
risks of the borrowers; the construction supervisor, who must ensure
that construction meets appropriate standards; and also of counselor
or advisor.
This guide is designed to help jurisdictions with program design
issues such as the identification of eligible property owners, establishment
of levels of assistance, setting terms and conditions for loans,
and basic approaches to loan processing and servicing.
It provides several sample forms used in the different stages of
loan approval and administration that jurisdictions may find useful
in establishing rehabilitation loan programs.
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