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2 <br />Housing & Urban Development (HUD) guidelines. The HOME Program imposes an affordability <br />period on projects assisted with HOME funds in order to ensure that HOME investments yield <br />affordable housing over the long term. For homebuyer projects such as the Community Home <br />Trust, the length of the affordability period is based on the amount of HOME funds invested in <br />the property: <br />HOME FUNDS PROVIDED <br />AFFORDABILITY PERIOD <br /><$15,000 <br />5 years <br />$15,000 - $40,000 <br />10 years <br />> $40,000 <br />15 years <br />However, the restrictive covenants CHT executes with the County stipulate 99 years of <br />affordability. As a result, houses that are originally sold with the assistance of HOME funds that <br />are later re- acquired by CHT must be re -sold to a family earning less than 80% AMI. Otherwise, <br />CHT must refund the HOME funds invested to the County from the proceeds of the sale. <br />FINANCIAL IMPACT: There is no financial impact regarding the policy allowing CHT to extend <br />a fee simple interest in properties sold. However, should the Board approve the proposed policy <br />change regarding selling homes to families above 80% AMI where the federal subsidy remains <br />in the home, this may reduce the number of low and moderately -low income families served by <br />the Orange County HOME Consortium. Notwithstanding this reduction in low income families <br />served, the affordability period as mandated by HUD would be met. <br />RECOMMENDATION(S): The Manager recommends that the Board review and approve the <br />policy changes as requested by Community Home Trust to permit CHT to extend a fee simple <br />interest to mortgage lenders and permit homes to be sold to persons up to 115% AMI where <br />permitted by HUD. <br />