Hagerstown considers joining HUD HOME program; council asked to find $138,000 local match

HAGERSTOWN, Md. — City staff told the mayor and city council at a June 3 work session that Hagerstown has an opportunity to participate in the U.S. Department of Housing and Urban Development's HOME Investment Partnerships Program but must identify roughly $138,000 in local funds to meet an initial participation threshold.

The discussion matters because HOME funds can be combined with Community Development Block Grant (CDBG) money in the city's five-year consolidated plan to expand affordable housing programs. "Our caveat is that at this time, no local funding, has been identified or is in the budget," a staff member said during the presentation.

Amanda Gregg, a staff member who presented the program, said HUD awarded about $361,181 to Hagerstown; HUD requires a participating jurisdiction's allocation to meet a $500,000 threshold for initial qualification. City staff said the local jurisdiction would need to "make up the difference" between the HUD allocation and the $500,000 threshold, which they estimated at about $138,000 to $139,000 for the first year. After initial qualification the program requires a 25% match for each annual award, but that match does not have to be provided up front and "can ... come from other sources," Gregg said.

Gregg and other staff recommended starting the HOME program by "piggybacking" on an existing CDBG activity such as the homeownership rehabilitation program to reduce the learning curve. She said Howard County, which has participated in HOME since 2000, began with a single activity and expanded over time.

Michelle (identified in the meeting as a staff member overseeing budget matters) told the council there is contingency in the general fund that could be used if the council decides to proceed. "In the general fund, we left money in contingency that was a small dollar amount for things unexpected ... If this group still wishes to take a hundred and 39,000 out of that bucket and then allocate it here, it's this is the this is the priority item that you wish to pursue," she said. Staff noted that no local funding has yet been officially identified or budgeted for participation.

Staff emphasized program constraints and administrative requirements: HOME funds must be committed within two years and expended within five; affordability and recapture rules vary by activity (homeownership assistance, new rental construction, tenant-based rental assistance), and monitoring requirements apply for tenant-based programs. Gregg said homeownership assistance typically targets households at 80% of area median income or below and that some uses carry affordability periods or recapture provisions.

Councilmembers asked operational questions including whether HOME funds can be paired with CDBG on the same activity; Gregg said an activity could be structured to use both sources (for example, $100,000 from CDBG and $100,000 from HOME on a rehabilitation project). Staff also noted that the city must notify HUD of its intent to participate by Friday, June 13, and requested a special meeting on June 10 for the council to take a formal vote.

Next steps: staff requested that the council schedule a special session for June 10 to vote on whether to notify HUD of participation; no formal city council vote was taken at the June 3 work session. If the council moves forward, HOME would be incorporated into the consolidated plan and annual action plans alongside CDBG.