August 18, 2011

HUD’s Analysis of the Washington Post’s Mislabeled HOME Projects

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In a May 15, 2011 article, the Washington Post inaccurately labeled an entire group of 700 HOME Program projects as “stalled.”  HUD has conducted an analysis of the HOME data used by the Post and has concluded that the Post’s assertions are inaccurate. Since the Post has been unwilling to share their list of projects with HUD despite numerous requests, HUD analyzed the same database using the same criteria the Post stated it used in reaching its conclusions. According to the Post, the dataset that they analyzed was the HOME Program’s November 30, 2010 Open Activities Report.[1]  There were 28,000 open activities at the time. From the 28,000 activities, the Post eliminated all homeowner rehabilitation activities and those activities with less than a $50,000 HOME commitment, as well as those for which all HOME funds had been disbursed. This elimination process produced a subset of 5,100 projects from which they pulled those activities with no draws (expenditures of HOME funds) for the previous 18 months and unilaterally concluded that these nearly 700 projects were “idling” and “stalled.”  However, these criteria are a poor proxy for status given how HOME dollars are actually used in the development process.

HOME and the Development Process

The Post’s conclusions lack a basic understanding of the housing development process and the HOME Program’s role in our nation’s affordable housing finance system. The affordable housing development process is complex. In order to ensure long-term affordability (in some states up to 55 years), projects require many layers of financing – each source with its own set of regulations and deadlines. HOME is one of these layers providing an average 20% of a project’s financing. HOME leverages nearly $4 in other public and private funds for every HOME dollar expended. The HOME financing may be expended by the project at any time during the development process, including upfront, during the construction financing or even at completion as permanent financing. Therefore, it would make sense that the development process would take longer and that a project might not draw HOME funds for 18 months, all while the project is moving along at a reasonable rate, without being stalled.

HUD Findings on the Post’s Mislabeled Projects

When HUD ran the data using the Post’s criteria, it found 797 projects. In order to be transparent and to allow others to verify HUD’s data, the database posted here lists all 797 projects according to the way each is categorized in HUD’s grants management system (IDIS). Because of the nature of the development process, open projects are always moving through the pipeline, so projects will move from open to completed or in some cases, to cancelled. As a result, this database is strictly a snapshot as of August 9, 2011. It shows that of the 797 projects, 5 were mistakenly set up as HOME projects and should not have been included.  Of the 792 remaining projects, IDIS reflects that 412 (52%) are completed, 363 (46%) are open, and 17 (2%) are canceled with all HOME funding repaid. Given that more than half are now complete, it is impossible that these projects were stalled on May 15.

The database posted here provides the status of these projects, made publicly available by HUD to set the record straight. This conservative categorization presents what is reflected in IDIS, regardless of what HUD may know about the project through contact with grantees. “Open” projects include many projects that are nearly complete and just waiting for final data to be entered in IDIS, with people already living in them. These data will change as the development process proceeds, but HUD is using these categories in order to provide the most up-to-date snapshot of what IDIS reported on August 9, 2011.



[1] The HOME Program Open Activities Report, which is publicly available on the HUD website for every HOME participating jurisdiction, includes all projects that have received a HOME funding commitment, are not yet completed, and information on the type of project and the percentage of the HOME funding that has been drawn (expended).

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