Detailed Information on the
HOME (Affordable Housing Block Grant) Assessment

Participating in independent evaluations and studies of the program to highlight areas for improvement.

Developing long-term outcome measures to assess the impact HOME has on communities and neighborhood quality, as a part of a larger performance measurement system.

Measure: Total number of years of affordability provided for low-income households residing in units produced from the investment of HOME funds

Explanation:Housing units produced with HOME funds must remain affordable for a minimum number of years depending upon the amount of the HOME investment. The greater the total number of unit-years (i.e., units produced x affordability period in years) of affordability, the greater the rent-stability for low-income families and the greater their disposable income for non-rent expenses.

Measure: Between FY2004 and FY2008, additional households that have purchased homes through the HOME Downpayment Assistance Initiative

Explanation:This measure is found in HUD's FY2003 - FY2008 Strategic Plan. The 200,000 households assisted represents the Downpayment Initiative's portion of the overall target

Measure: Annual increase in the average "blended" HOME investment per unit produced will be no more than 6 percent.

Explanation:The average per-unit level of HOME investment in a project is a function of the overall development cost and the availability of other funds, federal and non-Federal, for the project. If development costs such as land, labor, materials, and fees, rise, or higher subsidy levels are required in order to make units affordable to lower income households, the required HOME investment will rise accordingly. In addition,to the extent that other programs and funds are unavailable/reduced, more HOME funds will be needed to fill the gap or fewer units will be constructed/ rehabilitated as a consequence. Given the above factors, HUD estimates that the annual increase in the average HOME investment per unit will be less than 6 percent.

Measure: Number of HOME production units that are completed (includes rental units produced, new homebuyers, and existing homeowners assisted).

Explanation:This measure reflects one of the main goals of the program - increase the supply of affordable housing.

Is the program purpose clear?

Explanation: The purpose of the HOME program is to expand the supply of decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for very low-income families. The program also provides about 25% of its funding to support homeownership efforts. The President's Down Payment Assistance Initiative expands the program's focus on assisting first-time, low-income homebuyers.

Evidence: The purpose is expressed in Title II of the National Affordable Housing Act of 1990, which authorized grantees to fund four types of activities: 1) purchase, construction, or renovation of rental housing; 2) renovation or construction of for-sale housing and assistance to individual buyers of housing; 3) rehabilitation of owner-occupied housing units; and 4) tenant-based rental assistance (TBRA).

Does the program address a specific and existing problem, interest, or need?

Explanation: There continues to be a need to provide low-income families with decent affordable housing. As evidenced by the recently issued Millennial Housing Commission report, there remains a gap between the demand and supply for rental units affordable to low-income households.

Evidence: The HOME statute requires that all households assisted have incomes less than 80% of the area median income, and at least 90% of the households have incomes less than 60% of the median. Rental assistance is deeply targeted, with 41% (56% including TBRA) of completed projects benefiting families below 30 percent of the area median income.

Is the program designed so that it is not redundant or duplicative of any Federal, state, local or private effort?

Explanation: Several other Federal, state, and local programs as well as other for-profit and non-profits address the same affordable housing problems and needs as the HOME program.

Evidence: Federal programs such as vouchers and public housing all provide funding for affordable housing. Although it has the advantage of pulling together several funding sources into one program, the funding mechanisms are not unique to the HOME program and beneficiaries of HOME funding are often served by other housing programs.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The program design requires involvement and commitment of non-Federal actors. A 1999 Urban Institute Evaluation concluded that, "HOME has made a substantial contribution to state and local affordable housing efforts."

Evidence: All 50 states (plus Puerto Rico) and 551 local grantees (including 112 consortia) receive an annual allocation. An average of $15,780 HOME dollars are invested in each unit of affordable housing produced, with three dollars of other funds leveraged for each HOME dollar. The 2002 funding level of $1.8 billion will enable state and local governments to assist about 80,000 households per year.

Is the program effectively targeted, so program resources reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: HOME's deep targeting directly addresses the program's purpose which is to expand the supply of affordable housing, with primary attention to rental housing, for very low-income families.

Evidence: The HOME statute requires that all households assisted have incomes less than 80% of the area median income, and at least 90% of the rental households have incomes less than 60% of the median. Rental assistance is deeply targeted, with 41% (56% including TBRA) of completed projects benefiting families below 30 percent of the area median income.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: Following recommendations received from OMB in the FY 2004 PART review, long-term performance measures for HOME have now been included in HUD's FY 2003 - FY 2008 Strategic Plan and outcome measures have been introduced. Also under development are other long-term measures that would track outcomes of HOME activity such as percentage change in local homeownership rates or change in home prices.

Evidence: The following outcome and efficiency measures have been developed in consultation with OMB: unit-years of affordability from the investment of HOME funds will increase and the median home loan amounts of census tracts that receive HOME Program funds will increase. (Housing units produced with HOME funds must remain affordable for a minimum number of years. The greater the total number of unit-years of affordability, the greater the rent stability for low-income beneficiaries of HOME assistance and the greater their disposable income for non-rent expenses.) Furthermore, a new Performance and Productivity guide will be issued this year accompanied by 12 additional deliveries of this course to enable participating jurisdictions (PJs) receiving HOME funds to develop local performance measures to enable them to set their own program priorities and goals.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Specific, quantified targets have been set for most long-term measures identified in Question 2.1, although some measure's baselines remain under development. FY 2000 through FY 2003 results as contained in the respective PARs are used as the baseline for all long-term output measures.

Evidence: The targets reflect the fact that results have not improved over the preceding three-year base-line period for reasons discussed in the PAR. The level results anticipated over the coming years are ambitious when considering that the number of completions for rental units (other than TBRA), homebuyer units and existing homeowner rehabilitation have actually declined in number from FY 2000 to FY 2002. External factors such as program funding levels, national and regional economic conditions, and local discretion in the use of block grant funds may also continue to affect future results.

Does the program have a limited number of specific annual performance measures that demonstrate progress toward achieving the program's long-term measures?

Explanation: HOME's GPRA measures have a direct relationship to HOME and HUD's statutory purpose of promoting the availability of decent, safe, and affordable housing. However, several of the annual performance goals for rental housing fail to relate to outcomes.

Evidence: See measures section.

Does the program have baselines and ambitious targets and timeframes for its annual measures?

Explanation: Actual performance are largely based on the choices that participating jurisdictions make among their competing housing needs, fiscal conditions affecting State and local government program staffing levels, and general economic conditions affecting the cost and availability of housing and the income levels of potential homebuyers.

Evidence: See measures section.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, etc.) commit to and work toward the annual and/or long-term goals of the program?

Explanation: At the annual meetings for NCSHA, COSCDA, NCDA, and NaCO held in the first quarter of 2003, attended by State and local HOME Program administrators, HOME Program annual goals for FY 2003 were distributed and described by HOME Program staff. Attendees were asked to commit to supporting these goals and to report their accomplishments in the IDIS reporting system, which they did through a show of hands.

Evidence: Also distributed and described at these sessions, and separately to all PJs through HUD's field offices, were individualized HOME Program performance Snapshots, meant to encourage State and local PJs to improve performance linked to HUD annual goals and to report on these accomplishments in IDIS. These Snapshots are updated quarterly and available online. Finally, in the 10 months since the last PART was prepared, over $11.6 million has been recaptured from poor performing PJs. Through means such as these, HUD enforces local commitment to HOME's annual and long-term goals.

Are independent and quality evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Two evaluations of the HOME program have been rather broad in their scope and another has focused specifically on HOME rental units. A truly rigorous evaluation that compares HOME programs to other Federal housing programs or to districts that do not receive funding has not been attempted.

Evidence: In 1996, HUD contracted the Urban Institute to evaluate the HOME program. As part of the report, the researchers interviewed state and local officials and housing developers to research programmatic issues. A previous report, Implementing Block Grants for Housing: An Evaluation of the First Year of HOME, was produced in 1995. Abt Associates completed an evaluation of the ongoing compliance of HOME rental units in 2001.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The Department is able to estimate the effect of changes in HOME program funding on the production of affordable housing units and by type and tenure. HUD has real time data on the production of HOME units.

Evidence: The average per unit investment of HOME funds ($15,780) is used to calculate changes in units based on funding changes. Cost per unit figures are also broken out by eligible activity. Because the program is administered at the state and local level, it is difficult to know the magnitude of the impact of substantive policy or legislative changes.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The program is working to develop long-term outcome measures; however, it currently succeeds in identifying and addressing grantee performance issues. Final recommendations for new outcome measures will be adopted in the Department's 2004 Strategic Plan. HOME has taken several steps to identify and address weaknesses among grantees and CHDOs.

Evidence: HOME used technical assistance funds to develop eight training courses in 2002. Subjects include working with nonprofits, financial management, and measuring productivity and performance. Grantees can attend the regional workshops and course materials are available online. HOME plans to fill gaps in performance information on their homeownership programs with a survey of administrators.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Although data collection is constrained somewhat by HUD's Integrated Disbursement & Information System (IDIS), HOME regularly uses data submitted by grantees to improve performance and increase accountability.

Evidence: HOME currently publishes several online reports that rank grantees based on the timeliness of their expenditures, CHDO reservation requirement, commitments, and disbursements to determine compliance of individual grantees. HOME has also taken several steps to improve IDIS, through is HOME ROCS initiative.

Are Federal managers and program partners (grantees, subgrantees, contractors, cost-sharing partners, etc.) held accountable for cost, schedule and performance results?

Explanation: For the past several years, HUD managers' performance has been rated by the Performance Accountability and Communication System (PACS) and the Leadership Development and Recognition System (LDRS). Under this system, the elements used to rate a manager's performance are linked to the Department's GPRA goals. Ratings, promotions and monetary awards are appropriate to the manager's accomplishments, or lack thereof. At the grantee level, local managers have been held accountable for poor performance as well.

Evidence: In at least three instances, HOME Program directors have left their positions due, at least in part, to problems identified through HUD's oversight of their programs.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: HOME's unobligated balances are significant, but largely result from conflicts between the fiscal and program year of grantees. As part of HUD's commitment to the President's Management Agenda, Community Planning and Development (CPD) is reforming the consolidated plan to compare grantees planned and actual expenditures as well as streamline the plan and make it more results-oriented. HOME does periodically recapture funding that has expired or is misused.

Evidence: HOME's 2002 unobligated balances were $256 million. As of October 1, 2001, the Department had deobligated $9.1 million in non-CHDO funds and $4.4 million in CHDO funds from state and local partners as well as made $650,000 in grant reductions as a corrective action for incomplete or ineligible activities. In order to access funds for a project, a grantee must enter a project set-up in IDIS, which provides information about the tenure type, number of units, the activity being used for the project.

Does the program have procedures (e.g., competitive sourcing/cost comparisons, IT improvements, approporaite incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: HOME uses a variety of cost per unit measures for each area of program activity and for each of their grantees. Although the program has not incorporated efficiency measures or targets into their performance plans, HOME has developed an online "report card" to highlight efficiencies and inefficiencies among grantees, which will also increase the transparency and accountability of the program. HUD also awards technical assistance funds on a competitive basis when training is necessary to improve program performance.

Evidence: The online "report card" will provide cost per unit variables for each grantee and compare them to others in their state and the nation along the following measures -- leveraging ratio, low-income benefit, percent of rental units occupied, and percent of funds committed/disbursed/spent on completed units. Cost per unit measures for each of the various HOME activities is as follows: rental new construction - $22,545; rental rehab - $18,426; rental acquisition - $15,373; homebuyer new construction - $20,249; homebuyer rehab - $19,135; homebuyer acquisition - $7,206; homeowner rehab - $15,444; TBRA - $3,472.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The HOME program is routinely combined with other public and private financing for affordable housing such as Section 8 vouchers and the Low Income Housing Tax Credit (LIHTC).

Evidence: Jurisdictions develop spending plans for HOME funds in conjunction with three other HUD block grant programs -- Community Development Block Grants (CDBG), Housing for Persons with Aids (HOPWA), and Emergency Shelter Grants (ESG)-- in a "consolidated planning" document. HOME requires that recipients match 25 percent of their grant with local resources and that 15 percent of the grant is set aside for Community Housing Development Organizations (CHDOs). which encourage involvement from outside actors. The average project has three dollars of other funds for each HOME dollar.

Does the program use strong financial management practices?

Explanation: Several HOME regulations require grantees to use strong financial management and recordkeeping practices. Some grantees, however, have been found to have weak oversight of sub recipients, while grantees and CHDOs also have some administrative weaknesses (e.g., not in compliance with Circular A-87, A-122).

Evidence: A recent internal HUD IG audit survey of HOME recommended addressing several departmental or programmatic issues, but did not believe additional internal audit coverage was warranted at this time. HOME regulations require grantees to enter into a written agreement with any entity using HOME funds, so their performance can be maintained. These items must be in sufficient detail to provide a sound basis for the grantee to effectively monitor performance under the agreement. Governmental and non-governmental entities that administer HOME activities, with the exception of CHDOs, are subject to the cost principle requirements of either OMB Circular A-87 or A-122.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: While no serious management deficiencies have been identified, HOME regularly uses contact with associations and representatives of grantees, independent program evaluations, and review of IDIS reports to address possible management issues. HOME has identified and begun to address concerns regarding CHDO's completion of projects.

Evidence: HUD has used its technical assistance funds to address grantee performance problems with a combination of web-based and on-site training, written products and direct technical assistance. HOME has established a team of management, technical staff and contractors to make IDIS easier, smarter, and reduce the need for continual data clean up efforts. The team has been meeting twice a week. Improvements to IDIS will increase grantees' ability to use their data to manage their programs more effectively and efficiently.

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: A recent IG report of HOME evaluated the susceptibility of HOME to unnecessary risk of waste, fraud, or abuse. The report identified several areas of risk, but found that "the factors contributing to the risk are not new, some may be unavoidable and most are not unique to HOME versus other Community Planning and Development programs."

Evidence: The HUD field offices interact with grantees to ensure proper use of funds. In order for a HOME grantee to reserve HOME funds for a project information must be entered into IDIS. A project is only designated as complete after a completion report (including accomplishment and beneficiary data) has been entered into IDIS.

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: HOME makes several reports available on their web site that present performance information at the program and grantee level. The organization and dissemination of this information makes it useful for a variety of stakeholders. HOME staff have developed an online report card for each grantee, which includes individual cost efficiency and other performance measures that make the HOME program more transparent and accountable.

Evidence: HOME publishes several reports that rank grantees based on the timeliness of their expenditures, CHDO reservation requirement, commitments, and disbursements. The timeliness reports, for example, have helped contribute to a significant reduction of untimely grantees. The HOME National Production Report is updated quarterly with program level performance information.

Has the program demonstrated adequate progress in achieving its long-term outcome performance goals?

Explanation: The measures have only recently been identified, little progress has been made to date

Evidence: See Measures section.

Does the program (including program partners) achieve its annual performance goals?

Explanation: HOME remains within 10 percent of its goals, and exceeded its production unit goals in 2003.

Evidence: HUD has some problems with the accuracy of the data reported by grantees into IDIS, which makes analysis difficult. However, this has improved since HOME Snapshots have become public.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program performance goals each year?

Explanation: A comparison of disbursements to projects and completed units indicates a slightly increasing trend in per unit costs. Considering increases in inflation/housing costs and the difficulty of reaching the very low-income residents, the relatively flat costs per unit indicates increased efficiencies.

Evidence: The trend data for HOME per-unit costs over the last five years -- 1997: $16,252; 1998: $14,648; 1999: $14,889; 2000: $15,087; 2001: $15,539 -- increase less than the estimated 3 percent annual inflation rate, which indicates that the HOME Program had developed housing at a reduced per-unit cost. However, while the total number of households served has increased from 71,000 in 1996 to 81,000 in 2001, a 14 percent increase, the funding level over that same period has increased 28 percent.

Does the performance of this program compare favorably to other programs, including government, private, etc., that have similar purpose and goals?

Explanation: HOME compares favorably to other housing programs in several ways. HOME gives grantees the flexibility to use a variety of mechanisms to fund housing projects that meet local priorities. The program also has no long-term liability for the government. HOME works in concert with other housing programs as well as non-profit and for-profit housing providers.

Evidence: HOME demonstrates deep targeting of its funds, with 41% of the rental units produced with HOME funds occupied by families with incomes at or below 30% of the area median income. HOME rents (reflecting project costs) are generally lower in HOME projects without LIHTC versus HOME-LIHTC projects. The program also succeeds in involving community-based nonprofits through its CHDO requirement and improving their capacity. HOME leverages three times their investment with other dollars, compared to the CDBG average for housing programs of $2.31. Twenty-two percent of HOME units are located in high-poverty census tracts compared to 42% of public housing units and less than 9 percent of units occupied by Section 8 certificate and voucher holders. HOME investments, however, may help improve the quality of low-income neighborhoods. The relative cost advantages between HOME and other housing programs is unclear.

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: HUD contracted with the Urban Institute to evaluate the HOME program. As part of the 1999 report, the researchers interviewed state and local officials and housing developers. A previous report, Implementing Block Grants for Housing: An Evaluation of the First Year of HOME, was produced in 1995. Both studies found the HOME program to be effective in achieving the intended results.

Evidence: The March 1999 Urban Institute evaluation of the HOME program concluded that "HOME has made a substantial contribution to state and local affordable housing efforts."