Participant EligibilityProspective homebuyers must meet 6 requirements to be eligible for HOME funds. They must:
- Be a first-time homebuyer (meaning not having owned a home in the last 3 years)
- Be a qualified low-income or very low-income household
- Be the owner of the property after purchase
- Occupy the property as their principal residence after the purchase
- Attend HUD-certified housing counseling certificate classes offered locally, and be committed to post-purchase counseling
Home Income LimitsThe prospective homebuyer's household must have an annual income equal to or less than 80% of the median income for the target area. The HOME Program uses the Housing and Urban Development (HUD) Section 8 low-income limits. These limits are based on 80% of the area median income with adjustments for household size.
As these figures are revised annually, we recommend that interested applicants contact the Division of Neighborhood Housing and Revitalization at 973-266-5411, ext. 5398 for more information.
To ensure that all prospective homebuyers who receive assistance are eligible, the City's housing staff will need to collect income verification documentation from all applicants.
Eligible PropertiesAny property that will serve as the prospective homebuyer's principal residence is a eligible property type, including:
- A single family property (one unit)
- A two to four-unit property
- If HOME funds are used to assist a purchaser to acquire one unit in a two to four-unit property and that unit will be the principal residence of the purchaser, the long-term affordability requirements apply to the assisted ownership unit only.
- If HOME funds are used to help a purchaser acquire 1 or more rental units along with the homeownership unit, the HOME rental affordability requirements apply to the rental units.
- A condominium unit
- A cooperative unit or a unit in a mutual housing project (if recognized as homeownership by state law)
- A manufactured home
- At the time of completion, the manufactured housing must be connected to permanent utility hook-ups
- The manufactured housing must be located on a land that is owned by the manufactured housing unit owner, or on land for which the manufactured housing unit owner has a lease
- Located within the City or East Orange
Usage of Funds
Eligible CostsHOME funds can be used to cover:
- Acquisition (eligible homebuyers can receive funds to purchase affordable homes with down payment and/or closing cost assistance, or by reducing the monthly carrying costs of a loan from a private lender;
- Acquisition and rehabilitation (in addition to acquisition assistance, eligible homebuyers can receive funds associated with general property improvements that are considered standard for the area. These may include the correction of code violations, incipient code violations, and general property improvements. However, HOME funds cannot be used for luxury improvements.) Funding for this option may not always be available, certain limitations apply.
- New construction (the City can provide funds directly to developers to construct affordable housing. Eligible costs include project hard and soft costs, and relocation costs.)
Ineligible CostsIneligible costs include:
- Creation of secondary housing attached to a primary unit
- Installation of luxury items such as swimming pools
- Costs of equipment, furnishings, or other personal property not an integral structural fixture, such as window air conditioners, washers or dryers (however, stoves and refrigerators are eligible costs)
- Rehabilitation of property that includes income producing rooms or units.