42 U.S.C. § 12750 — Matching requirements

(a) Contribution: Every jurisdiction that takes part must add its own money to affordable housing. Over each fiscal year, the jurisdiction's contributions must add up to at least 25% of the HOME Investment Trust Fund money it draws that year. This is on top of any amount already required under section 12746(3)(A)(ii). (b) Recognition: A contribution only counts toward that 25% if one of two things is true. Either it goes to housing that qualifies as "affordable housing" under section 12745, or it goes to a project where at least half the units qualify as affordable housing under section 12745. (c) Form: The contribution can take several forms. It can be (1) cash from non-federal sources — but not money from a section 5306(b) or 5306(d) grant. It can be (2) the value of taxes, fees, or other charges the jurisdiction normally charges but waives, delays, or gives up to make the housing more affordable. It can be (3) the value of land or other real property, appraised the way the Secretary approves. It can be (4) the value of on-site or off-site infrastructure built for the affordable housing. It can be (5) bond financing proceeds — up to 50% of proceeds from bonds repaid with revenue from a multifamily project, or up to 25% of proceeds from bonds repaid with revenue from a single-family project, but bond proceeds together can never cover more than 25% of the total match required. It can be (6) the reasonable value of site-preparation work, construction materials, or donated or volunteer labor. It can be (7) any other contribution the Secretary decides counts. (d) Reduction of requirement: (1) In general: The Secretary must lower the 25% match for a jurisdiction that certifies it is in "fiscal distress" — cutting the requirement by 50%. For a jurisdiction that certifies it is in "severe fiscal distress," the Secretary must cut the requirement by 100%, meaning no match at all. (2) Definitions: "Fiscal distress" means a jurisdiction other than a State meets one of the two distress tests below. "Severe fiscal distress" means it meets both tests. (3) Distress criteria: Test one — the jurisdiction's average poverty rate last calendar year was at least 125% of the national average poverty rate. Test two — its average per capita income last calendar year was less than 75% of the national average per capita income. The Census Bureau's numbers are used for both tests. (4) States: For a State rather than a local jurisdiction, the Secretary instead looks at the State's fiscal capacity and spending needs, using data compiled by a national organization. (5) Waiver in disaster areas: If part of a jurisdiction is in a federally declared disaster area under the Stafford Act for any part of a fiscal year, the Secretary may cut the match requirement for that year by up to 100%.