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7 <br />If aid funds are used for demolition or removal of existing structures, does affordable <br />housing need to be constructed on the site? <br />Yes. The expense must be tied to affordable housing for eligible households. Demolition or clearing of <br />land alone, including for speculative or future development of eligible housing, is not an eligible <br />project. <br />Can funds be used for planning activities (soft costs) for new construction and preservation <br />affordable housing projects? <br />Soft costs are only eligible as part of a qualifying project. General or speculative planning activities <br />unrelated to a qualifying project are not an allowed use of funds. <br />Can funds be used for downpayment assistance for homebuyers? <br />Qualifying projects include homeownership projects for income-eligible households. <br />Downpayment assistance may be provided as permanent financing or gap financing, depending on <br />program requirements established by the aid recipient. <br />Can the housing aid funds immediately be deposited into a Local Housing Trust Fund? <br />Funds can be held in a local housing trust fund while recipients determine if a project qualifies. <br />Funds must be spent on a qualifying project by the deadline in statute . Funds remaining in a local <br />housing trust fund past the deadline will only be considered “spent” on a qualifying project if the aid <br />recipient demonstrates that it could not spend funds by the deadline due to factors outside their <br />control. <br />Can funds be transferred to a county or regional Housing and Redevelopment Authority <br />(HRA) if they are spent on qualifying projects? <br />Yes. Funds can be transferred to a county or regional HRA if they are spent on qualifying projects. <br />The original aid recipient is still responsible for all requirements related to the funds, including <br />reporting. <br />Can funds be used for developing new infrastructure, such as utilities and roads, or <br />upgrading existing infrastructure if the infrastructure serves affordable housing? <br />Potentially. The infrastructure would need to be part of a qualifying project. All requirements related <br />to project type, income affordability and other accessible requirements would also need to be met. <br />Speculative site and infrastructure development would not be eligible. <br />Page 41 of 43