24 C.F.R. § 92.250
§ 92.250 Maximum per-unit subsidy amount, underwriting, and subsidy layering. (24 CFR Part 92)
Operative Text
(a) Maximum per-unit subsidy amount. The total amount of HOME funds that a participating jurisdiction may invest on a per-unit basis in affordable housing may not exceed the per-unit dollar limits established by HUD in accordance with section 212(e) of the Act. HUD will publish the per-unit dollar limits for the area in which the housing is located annually. HUD will publish its methodology for determining maximum per-unit dollar limits through a publication in the Federal Register with the opportunity for comment. (b) Underwriting and subsidy layering. Before committing funds to a project, the participating jurisdiction must evaluate the project in accordance with guidelines that it has adopted for determining a reasonable level of profit or return on owner's or developer's investment in a project and must not invest any more HOME funds, alone or in combination with other governmental assistance, than is necessary to provide quality affordable housing that is financially viable for a reasonable period (at minimum, the period of affordability in § 92.252 or § 92.254) and that will not provide a profit or return on the owner's or developer's investment that exceeds the participating jurisdiction's established standards for the size, type, and complexity of the project. The participating jurisdiction's guidelines must require the participating jurisdiction to undertake: (1) An examination of the sources and uses of funds for the project and a determination that the costs are reasonable; and (2) An assessment, at minimum, of the current market demand in the neighborhood in which the project will be located, the experience of the developer, the financial capacity of the developer, and firm written financial commitments for the project. (3) For projects involving rehabilitation of owner-occupied housing pursuant to § 92.254(b): (i) An underwriting analysis of the homeowner's ability to repay the HOME-funded rehabilitation loan is required only if the loan is an amortizing loan; and (ii) A market analysis or evaluation of developer capacity is not required. (4) For projects involving HOME-funded homeownership assistance pursuant to § 92.254(a) and which do not include HOME-funded development activity, a market analysis or evaluation of developer capacity is not required.
Section 92.250 establishes two related financial guardrails for HOME-funded affordable housing projects. First, it caps the total HOME dollars that can be invested per housing unit at limits HUD sets and publishes annually by geographic area, with the methodology subject to public comment in the Federal Register. Second, before any funds are committed, the local participating jurisdiction must apply its own written underwriting and subsidy-layering guidelines to confirm that the combined public investment is no more than necessary to make the project financially viable and that developer or owner returns stay within locally established standards—with some streamlined requirements for owner-occupied rehabilitation and homeownership assistance projects.
Plain English — not legal advice.
Property owners and developers seeking HOME funding should be aware that § 92.250 shapes how much public subsidy a project can receive and how thoroughly the participating jurisdiction will scrutinize the deal before committing funds. A compliant participating jurisdiction will review all sources and uses of funds, assess cost reasonableness, evaluate market demand and developer experience and financial capacity, and confirm that firm written financial commitments are in place. Developers generally prepare detailed project budgets and financial documentation that allow the jurisdiction to complete this analysis, and they should expect that projected returns will be benchmarked against the jurisdiction's published standards for projects of comparable size, type, and complexity.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
For tenants and housing advocates, § 92.250 is relevant because it is one of the federal rules designed to ensure that HOME-assisted housing remains genuinely affordable rather than over-subsidized in ways that benefit developers at public expense. The per-unit subsidy caps and underwriting requirements mean that a participating jurisdiction is obligated to follow a documented review process before committing HOME funds to any project. Tenants or community members who believe a jurisdiction is not following its own underwriting guidelines or is exceeding HUD's per-unit limits may raise concerns with the local participating jurisdiction, contact HUD's regional office, or reach out to a tenant-rights or housing-advocacy organization for guidance on available oversight and complaint mechanisms.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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