Wednesday, December 2, 2009

Cincinnati on the hook for $352K in ineligible HOME expenditures

The City of Cincinnati will have to pay more than $350,000 for ineligible HOME program spending that was uncovered by U.S. Department of Housing and Urban Development (HUD) audits.

The audits were part of HUD's administration of all programs utilizing federal HOME funds.

The audits found that three activities involving the Homeowner Rehab Loan/Lead Grant Program, administered by the Home Ownership Center of Greater Cincinnati, were ineligible for assistance, and two additional activities did not contain significant documentation.

HUD also found that two activities under the American Dream Downpayment Initiative Program (ADDI), administered by the City's Department of Community Development, lacked sufficient documentation, and five activities lacked a required lead-based paint disclosure form.

To cover the shortfall and to fulfill its contract with HUD, the City will transfer of $300,000 from its HOME Match account to an income tax permanent improvement fund account, transfer of $52,512 from the Strategic Housing Initiatives Program '09 capital improvement program account to that same income tax account, and then transfer the $352,512 from the income tax account to HOME Investment Partnership Fund 411.

Other HOME legislation

At the same meeting last week, City Council passed two ordinances approving the expenditure of HOME funds for the creation of a affordable housing.

The first ordinance authorizes the transfer and appropriation of $100,000 to fund ADDI, a program that provides up to $8,500 in down payment and closing cost assistance for first-time low- and moderate-income home buyers. Over 200 applications have been pre-approved and are awaiting funding.

The second ordinance authorizes the transfer and appropriation of $165,000 to help Cincinnati Habitat for Humanity with tap and permit fees to aid in the construction of new housing for low-income families.

Previous reading on BC:
Cincinnati considers ordinances for ADDI, Habitat (11/18/09)
Neighborhood stabilization funding to be tweaked (5/13/09)
ADDI program helps sell homes in the City (12/14/07)