Q: “If we have a project with a mix of 30% and 40% units, are HTF funds allowed to rehab all units or only those 30% units? and is there any incentive to move some 40% units to 30% AMI?”
A: If HTF funds are used to rehab a unit, then that unit can only be occupied by households with income at or less than 30% AMI or the poverty level. Units for households with higher incomes than that would have to get rehab money from other sources (not a bad idea) such as CDBG (which is grossly underutilized for housing rehab), HOME, maybe Federal Home Loan Bank AHF/CIP.
There might be an incentive to move from 40% to 30% (there is most certainly a greater need for units affordable to households less than 30% AMI; a national shortfall of 7.2 million) — but we definitely do not want to displace people. Instead make better use of CDBG and other sources.
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