Escondido staff outline HOME and HOME-ARP funding, recommend RFP to preserve expiring dollars

City staff presented an update Oct. 15 on the federal HOME Investment Partnerships (HOME) program and the HOME‑ARP (American Rescue Plan) allocation and recommended a request for proposals to spend available funds.

Housing and Neighborhood Services Manager Danielle Lopez said the HOME program is “HUD’s largest block grant dedicated to creating affordable housing,” and outlined eligible uses, restrictions and multi‑year funding balances. Management analyst Norma Olguin reviewed both program rules and recent local projects.

The presentation said the city currently has roughly $4.5 million in regular HOME funds (after required set‑asides) and about $2.0 million in HOME‑ARP funds. Staff proposes releasing an RFP that would combine approximately $4.5 million of HOME and HOME‑ARP to preserve expiring funds and prioritize rental housing, tenant‑based rental assistance (TBRA), and first‑time homebuyer assistance. The HOME‑ARP dollars are targeted to people experiencing or at risk of homelessness and may be used for construction of rental housing, tenant assistance, supportive services and acquisition of non‑congregate shelter units; HOME (regular) remains restricted to HUD‑listed eligible housing activities.

Staff reviewed recent uses of HOME funds: a $1.0 million award to San Diego Habitat for Humanity to create 10 for‑sale homes (El Norte Home Project), and a $4.0 million award to National CORE for Valley Senior Village, a 50‑unit senior project with 25 units designated as permanent supportive housing.

Staff described two ongoing programs funded with HOME dollars: a senior rental subsidy program budgeted at about $72,000 a year (about 30 seniors at $200 per month) and a first‑time homebuyer loan program that currently caps assistance at $25,000. Lopez and Olguin said the $25,000 cap is increasingly inadequate as home prices rise and recommended staff evaluate raising the cap (examples presented included $50,000). Council members asked staff to model intermediate options (for example $35,000) and show fiscal impacts.

Council consensus and staff direction

Councilmembers expressed support for expanding the senior rental subsidy program and increasing the first‑time homebuyer assistance limit. Multiple councilmembers asked staff to return with specific scenarios and fiscal analyses for: (a) increasing the number of seniors served and/or the monthly subsidy, and (b) raising the homebuyer assistance cap (staff offered $35,000 and $50,000 scenarios) and noted that certain changes would trigger a HUD substantial amendment process.

Staff noted program constraints and compliance obligations: HOME funds cannot be placed in a general housing trust fund or used for shelter operations; HOME‑ARP has a hard expenditure deadline of Sept. 30, 2030; HOME requires monitoring of leases, income eligibility and long‑term affordability; and HUD rules (24 CFR Part 92) govern eligible activities and set administrative caps and CHDO set‑asides.

Next steps

Staff said it will release the RFP for affordable housing development consistent with the council’s 2024–25 Annual Action Plan direction, return with modeled scenarios (including impacts that would trigger a substantial amendment and the related public‑hearing schedule), and report back on program guideline updates and outreach timing.

Ending

Council provided guidance but did not take a formal vote on program rule changes during the meeting. Staff will return with specific financial scenarios and any required action items if the council elects to change current HOME allocations.