Glossary of Commonly Used Words & Phrases

The majority of the following words, terms or phrases are commonly used by the NAHTI players in describing their housing activities under the current agreement between NAHTI and HUD.  Therefore, many of the terms, especially the technical ones, are HUD-related and can be further described through the HUD home page at http://www.hud.gov. There are also some general affordable housing terms that also relate to the NAHTI project and are relevant to state and local governments. Again, these definitions are not all-inclusive, but we hope that they help you better understand what NAHTI does.

Affordable Housing: Housing that is moderately priced that, in this case, meets the standards of the HOME program and can be either purchased or leased by families or individuals who are classified as low-income under the HOME program.  

Assisted Housing: Under the Public and Indian Housing program, HUD gives grants to public housing agencies (PHAs, including Indian housing authorities (IHAs)) to finance the capital cost of the construction, rehabilitation or acquisition of public housing developed by PHAs. Eligible families and individuals must qualify as "low-income families," which are those with incomes no higher than 80% of median income for the area. To cover the shortfall between tenant rents and operating expenses, HUD pays operating subsidies to most PHAs. To cover modernization of existing public housing, HUD makes modernization grants to PHAs.  
  
Bonds: Any interest-bearing or discounted government or corporate security that obligates the issuer to pay the bondholder a special sum of money, usually at specific intervals, and repay the principal amount of the loan at maturity. Bondholders have an IOU from the issuer, but no corporate ownership privileges. 

Bridge loan or interim financing: Short-term loans designed to bridge the gap between the time money is needed, e.g. between construction, and the time of a permanent loan. Also covers the period (gap) between the construction loan and equity payments made by investors over time in a low-income housing tax-credit project. 

Capacity Building for Community Development and Affordable Housing: Section 4 of the HUD Demonstration Act of 1993 authorizes HUD to provide assistance through the National Community Development Initiative to develop the capacity and ability of community development corporations (CDCs) and community housing development organizations (CHDOs) to undertake community development and affordable housing projects and programs. Private sources must provide a match 3 times the amount of any assistance provided under this section. 
  
Certificates: Tenant-based rental housing provided under Section 8 of the U.S. Housing Act of 1937. The tenant contribution to rent is limited to 30 percent of the adjusted income of the assisted family or individual. 

Community 2020: Mapping software developed by HUD to track where various HUD funds are being spent in communities across the country.  Communities are being encouraged to utilize the new software in any new Consolidated Plans they are planning to submit to HUD for federal assistance. 

Community Builders: HUD's new fellowship program to train and put in place paid, temporary skilled professionals at the local level to serve as "HUD's front door."  The Community Builders are meant to be the first point of contact with the agency for the thousands of people, both in the public and private sector, who need assistance from HUD. 

Community Development Block Grant (CDBG): A Federal program created under the Housing and Community Development Act of 1974. This program provides annual grants  on a formula basis to be used for a wide range of community development activities directed toward neighborhood revitalization, economic development, and improved community facilities and services. CDBG replaces several categorical grant programs such as model cities program, the urban renewal program and the Housing Rehabilitation Loan and Grant Program.  

Community Home Improvement Mortgage Loan: An alternative financing option that enables low- and moderate-income home buyers to purchase housing that has been improved by a non-profit Community Land Trust, and to lease the land on which the property stands. 

Community Housing Development Organization (CHDO): A non-profit 501(c)(3) charitable or 501(c)(4) civic/community organization where at least one-third of its Board is low-income and/or lives in a low-income census tract, the staff and/or the Board has housing development expertise or will obtain such expertise within six months and is not under the control of a private, for-profit organization or any unit of government. The CHDO's article of incorporation must include low-income housing development as a purpose. This federally-defined housing provider is eligible to receive 15 percent of all federal HOME funds for housing development and 5 percent of HOME funds for operating costs. 

Community Reinvestment Act (CRA): a 1977 law that requires banks and savings and loan institutions to take affirmative steps to help meet the credit needs of the communities they are chartered to serve, especially low- and moderate-income communities. The Act directs the four banking regulatory agencies (Federal Reserve Board, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and the Office of Thrift Supervision) to evaluate the extent to which these institutions are meeting local credit needs. 

Comprehensive Housing Affordability Strategy (CHAS): A document written by the local government describing the housing needs of the low- and moderate-income residents, outlining strategies to meet the needs and listing all resources available to implement the strategies. This document has now been incorporated into the Consolidated Plan, which, as with the CHAS, is required to receive many federal funds. 

Consolidated Plan: Before receiving HOME funds, a jurisdiction must submit (and HUD must approve) its Consolidated Plan, including certain HOME program submissions. The contents required by law for the Comprehensive Housing Affordability Strategy (CHAS) have been incorporated into the Consolidated Plan, in which local governments and State explain how they will coordinate the HOME program with the CDBG, ESG and HOPWA programs. The Consolidated Plan describes housing needs and the State's or local government's strategic plan to address those needs, including what activities will be funded. 

Cooperative: A form of common property ownership in which the residents or multiple dwelling units, usually in an apartment building, do not own the units they occupy in fee-simple, but rather own shares in the corporation that owns the property. The tenants elect a Board of Directors who are responsible for managing the affairs of the building. 

Cooperative Agreement Between LHA and Local Government: Agreement between the Local Housing Authority (LHA) and the local government under which the government gives tax-exempt status to the LHA and its property and agrees to provide such municipal services, such as police and fire protection, trash removal, etc,. and the LHA agrees to make payments in lieu of taxes (PILOT), usually 10 percent of the rents collected, excluding utilities.   

Economic Development: A general term indicating projects to strengthen an area's economy and employment base. 

Empowerment Zones (EZs) and Enterprise Communities (ECs): Selected designations made by the Secretaries of HUD and Agriculture that allow for direct CDBG funds to flow into the designated area or community to improve the economic viability of the designee. EZs and ECs must meet specific criteria to establish their relative need with respect to poverty, unemployment and general economic distress.  The State and local governments that nominate the areas for designation are required to submit a strategic plan detailing the way in which they intend to achieve the purposes of the programs by addressing a list of criteria. Written assurances are required that the strategic plan would beimplemented. 

Entitlement Community: An urban county or metropolitan city eligible to receive a community development block grant directly from HUD in an amount determined by HUD by formula. 

Federal Housing Administration (FHA): A federal agency designed to encourage private housing financing for low-income families or individuals through the provision of mortgage insurance 
Government National Mortgage Corporation (GNMA): Also known as Ginnie Mac. A government-owned corporation which is an agency of HUD. Ginnie Mac guarantees, with the full faith and credit of the U.S. Government, full and timely payments of all monthly principal and interest payments of registered holders. The securities are issued by private firms (such as mortgage bankers and savings institutions) and sold through securities brokers. 
  
Home Investment Partnership Program (HOME): Authorized under Title II of the Cranston-Gonzales National Affordable Housing Act (NAHA) of 1990. This federal entitlement program is designed to expand the supply of decent affordable housing for low- and very low-income families and individuals. HOME funds may be used for: tenant-based rental assistance; assistance to homebuyers; property acquisition; new construction; rehabilitation; site improvements; demolition; relocation; and administrative costs. Recipients have rated it as being one of the most flexible and successful programs ever offered by HUD. 

Housing Opportunities for People Everywhere (HOPE): Enacted under Title VI of the Cranston-Gonzales National Affordable Housing Act of 1990. This federal program is intended to provide homeownership opportunities for low to moderate income families through the purchase of properties owned by entities such as HUD, Resolution Trust Corporation, the Veteran's Administration, or a state or local government.  

HOPE 1: Housing opportunities for homeownership for public and Indian housing.  

HOPE 2: Housing opportunities for homeownership of multifamily units.  

HOPE 3: Housing opportunities for homeownership of single family homes.  

HOPE VI: Revitalization of severely distressed public housing. 
  
Lease-Purchase Mortgage Loan: An alternative financing option that allows low- and moderate-income home buyers to lease a home with an option to buy, where a portion of each month's rent payments is earmarked for a savings account in which money for a down payment accumulates. 

Leasing Cooperative: The title of a building is held by someone other than the co-op members. The title owner leases the units back to the co-operators generally for a period of time. This gives the co-operators management responsibility while allowing for the cooperative to get certain benefits. Applicable in the case of Low-Income Housing Tax Credit Syndicated projects. The title holder benefits from the tax write-offs available for low-income housing while the cooperative retains management of the building and gets some of the syndication proceeds. 
  
Loan Guarantee: Generally a pledge by a federal agency, or a unit of state or local government or other entity that it will repay an outstanding debt on a loan to a conventional lender in the event the borrower defaults. 

Low Income Housing Tax Credit (LIHTC): A tax credit allowed for investors as an incentive for the development and preservation of multi-family rental housing affordable to low- and very low-income households. 

Low Income/Very Low Income: Definition based on family income as a percentage of the median income for the area. There may be more than one definition. For purposes of the low-income housing tax credit, low income is defined as family income not more than 60% of the area median by family size for a family of four or 50% of area median income for very low-income families. 

Municipal Revenue Bond: A bond issued to finance public works such as bridges or tunnels or sewer systems and supported directly by the revenue of the project. 

Not-for-Profit (Nonprofit): An organization formed under a section of the Internal Revenue Code (Section 501) to carry out specific eligible charitable and civic activities. Nonprofit housing organizations must carry out eligible low-income housing activities and/or services to a qualified low-income population. 

Participating Jurisdictions (PJs): A unit of local or state government authorized to receive HOME funds directly from HUD and qualify for the appropriate minimum funding. 

Planned Unit Developments (PUDs): A project or subdivision that consists of common property that is owned and maintained by an owners association for the benefit and use of the individual PUD unit owners. 
  
Public Housing: Lower-income housing owned and operated by a public housing agency and assisted under the U.S. Housing Act of 1937 (other than under Section 8 or 17). 

Section 8: Provides rental assistance for low and very low income households by providing direct payments of rent through public housing authorities to landlords. The payments cover the difference between 30 percent of a family's adjusted gross income and the HUD approved or fair market rent for the geographic area where the housing is located. 

Section 108 Loan Guarantees: The loan guarantee provision of the CDBG program. Section 108 provides communities with a source of financing for economic development, housing rehabilitation, public facilities and large-scale physical development projects. 

Single Family Housing: A type of residential structure designed to include one dwelling. Adjacent units may share walls and other structural components but generally have separate access to the outside and do not share plumbing and heating equipment. However, several Federal housing programs classify buildings with up to four attached units as single-family housing. 

Subsidized Second Mortgage: An alternative financing option for low- and moderate-income households that also includes a down payment and a first mortgage, which funds for the second mortgage provided by the city, county, or state housing agencies, foundations or nonprofit corporations. Payment on the second mortgage is often deferred, carries no or low interest rates, and part of the debt may be forgiven for each year the family remains in the home. 

Sweat Equity: Value added to a property due to improvements as a result of work performed personally by the owner.  
  
Tax Credit: A dollar-for-dollar reduction against income tax payments that would otherwise be due. Contrasted with tax deductions that reduce taxable income.

HUD