Subject: From: Date:

Re: Home Construction Lyvette Turk, City of East Chicago 10/30/2020 2:28:39 PM

1. Since the project is for 11 houses, Davis Bacon does not apply per 24 CFR 92.354(a), correct? YES 2. Are security systems or home alarm systems allowable expenses under HOME? I believe they are since (I think) it's a fairly standard feature. NOT SURE ABOUT THIS ONE. 3. Would resale or recapture provisions apply once the houses are sold, assuming we're not providing any HOME assistance other than paying the contractor for the construction of the homes. We plan to sell the homes at cost. RESALE WOULD APPLY. SEE 24 CFR 92.254(a)(5)(ii)(A)(5), which says: Amount subject to recapture. The HOME investment that is subject to recapture is based on the amount of HOME assistance that enabled the homebuyer to buy the dwelling unit. This includes any HOME assistance that reduced the purchase price from fair market value to an affordable price, but excludes the amount between the cost of producing the unit and the market value of the property (i.e., the development subsidy). The recaptured funds must be used to carry out HOME-eligible activities in accordance with the requirements of this part. If the HOME assistance is only used for the development subsidy and therefore not subject to recapture, the resale option must be used.

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