3-1: American Dream Downpayment Initiative (ADDI)

Appendix 3-1

American Dream Downpayment Initiative (ADDI)—Side-By-Side Comparison of Downpayment Assistance Requirements—By Source of Funds

			ADDI FY 2003 Funds (2003 HUD Appropriations Act)¹
					ADDI FY 2004-2007 Funds (ADDI Legislation)¹		HOME Allocation (NAHA)¹

		FORMULA	Need² for, and prior commitment to, assistance to homebuyers	Need² by state; then, by local PJ. Funds to local PJs w/populations of more than 150,000 or allocation greater than $50,000 only		HOME Formula

		INELIGIBLE PJs³		The Commonwealth of Puerto Rico and local PJs in Puerto Rico

ELIGIBLE HOMEBUYERS			Must be “first-time” homebuyer	Must be “first-time” homebuyer		No “first-time” homebuyer requirement
		ELIGIBLE USES OF FUNDS	Downpayment assistance	Downpayment assistance and rehabilitation. Rehabilitation must be completed within one year of purchase		All HOME eligible activities. Rehabilitation property standards must be met within 2 years of purchase

		USE OF FUNDS FOR ADMIN COSTS4	Not eligible to pay admin costs; included in calculating HOME 10% admin limit	Not eligible to pay admin costs; not included in calculating 10% HOME admin limit		10% of HOME funds may be used for HOME admin, and the costs of administering ADDI

		ASSISTANCE CAPS	Subject to HOME maximum per-unit subsidy	Per-family limit: The greater of $10,000 or 6% of purchase price; Also subject to HOME maximum per-unit subsidy when used in combination with HOME		Subject to HOME maximum per-unit subsidy

		MATCH	Match requirement	No match		Match requirement
URA			Subject to URA	Not subject to URA		Subject to URA
		PROGRAM INCOME	Program income generated under ADDI treated as HOME program income	Program income generated under ADDI treated as HOME program income		HOME program income requirements

			ADDI FY 2003 Funds (2003 HUD Appropriations Act)¹
					ADDI FY 2004-2007 Funds (ADDI Legislation)¹		HOME Allocation (NAHA)¹

	REALLOCATIONS		No reallocation of funds is possible since the 3-year statutory limit on availability of appropriations will result in any funds recaptured after 24 months for failure to meet the commitment deadline being returned to Treasury	Funds reallocated as part of the next fiscal year’s ADDI formula distribution		HOME reallocation requirements

	CHDO		Not subject to CHDO set-aside; not an eligible use of set-aside funds	Not subject to CHDO set-aside; not an eligible use of set-aside funds		15 percent of HOME allocation set aside for CHDO projects; downpayment assistance not an eligible CHDO set-aside activity

	CONSOLIDATED PLAN		2004 Action Plan must address the use of these FY 2003 ADDI funds	Two new narratives (“outreach” and “suitability”) required beginning with the 2004 Action Plan in order to be eligible for ADDI funding; the Action Plan must also address the use of ADDI funds		No change

1 Statutory source of requirements.

2 “Need”: The percentage of low-income households residing in rental housing based on U.S. Census data.

3 NOTE: Insular Areas are not included in the definition of PJ in the HOME Program. Therefore, Insular Areas will not receive ADDI funding in FY 2004 and subsequent allocations. Funds allocated to Insular Areas in FY 2003 were 0.2% of the combined HOME/ADDI appropriation.

4 NOTE: Project soft-costs for the delivery of ADDI-funded downpayment assistance and (except for FY 2003 ADDI funding) rehabilitation are an eligible use of ADDI funds.

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