Affordable Home Development Program
Information for Developers
The Affordable Home Development Program seeks to create communities of single-family homes around the city. By providing financing to developers on their eligible projects, the City can make it possible for developers to sell homes at affordable prices to current Houstonians.
Information for Homebuyers
The City of Houston’s New Homes for Houston programs assist Houstonians in purchasing a home. The Housing and Community Development’s Large Tract Division has invested in constructing new single-family homes in Neighborhoods throughout the City. For more information, check out the New Homes for Houston Neighborhoods website.
- Eligible organizations include:
- For-profit entities
- Non-profit entities
- Partnerships of for-profit and non-profit entities
- Developers must be in good standing with the City of Houston on all previous loans, grants, and commitments
- Developers must have experience and the capacity to complete proposed projects
- Developers must abide by fair housing law and not discriminate against members of protected classes
- Developer must have site control at the time of application
- Site must include 40+ affordable homes
- At least 40% of the total homes must be affordably priced, with priority given to developments with greater affordability
- Affordable homes must be equivalent (in quality and planning) to market-rate homes
- Site must be located within City of Houston limits , and affordable homes must be sold to current residents of Houston
- Homes must be outside of the floodway and 100-year floodplain
- All homes must be newly constructed and meet:
- ENERGY STAR® certification standards
- City of Houston minimum construction and resilience standards
- Chapter 19 Floodplain Ordinance 2018-258 , if located within 500-year floodplain
- Home sales and marketing must abide by fair housing law and not discriminate against members of protected classes
- Preference for 50% to 60% of all homes to be affordable for contiguous sites
Steps to Apply
The Affordable Home Development Program (AHDP) is accepting applications for the construction of new single-family homes that will be attainable to low-to-moderate-income homebuyers.
To be considered for HCD funding, development proposals must align with the AHDP Guidelines and threshold criteria. All applications submitted by Friday, January 13, 2023 at 11:59 PM will be reviewed for project viability and initial threshold criteria.
Please submit your proposal through the AHDP Application Portal .
Documents & Resources
Before submitting your proposal, you can fill out this questionnaire to see if your proposal will be competitive. You can also reach out to us at firstname.lastname@example.org.
|Conflict of Interest Form: Completed By Business Entities||08/30/22|
|AHDP Video Presentation||9/21/21|
|AHDP Video Presentation #2||9/30/21|
|Second Site Supplemental Form||12/07/21|
|Full Application Workbook||01/30/23|
Frequently Asked Questions
Q: Can applicants only submit sites in the City Limits? - Answer
A: We are only accepting applications within Houston City Limits.
Q: What is the minimum lot size? - Answer
A: There is no minimum lot size. The development project must include a minimum of 40 Affordable Homes
Q: Can developers submit multiple projects in the same application, or do separate applications need to be submitted per project? - Answer
A: Please submit an application for each Development Project. Each project will be evaluated on its own merit.
Q: Is there a maximum amount of funds that a project can receive? - Answer
A: No, The City has not set a maximum amount of funds awarded to each Development Project.
Q: What exactly do you mean by Single Family? - Answer
A. Single Family Homes refer to homeownership, not the style or structure of the home. We are encouraging innovative design single-family detached, townhomes, condo, etc
Q: If townhomes and condo developments are allowed, won't it be more like multi-family? - Answer
A. We will consider condominiums and townhomes as Single-Family Developments as long as the Developer transfers the deed and sells the property to low-to-moderate-income Homebuyers.
Q: Is there a $250K price cap for an Affordable Home, but the four (4) bedroom home was 278K that is still considered affordable? - Answer
A. We define Affordable Homes as a sales price in which a Homebuyer pays no more than thirty (30%) percent of gross income for monthly mortgage and utilities. The Affordable Homes in each Development should be sold to Homebuyers with Area Median Income of 120% or below as calculated by HUD
This calculation changes annually; therefore, the sales price of the Affordable Homes should be listed based on the affordability of the low-to-moderate income Homebuyers at the time of sale.
Q: Many home builders have financing means/lenders available for home buyers. Would this benefit potential home buyers, or should that be left up to the Buyer? - Answer
A. Yes, Builder financing is a welcomed option for Homebuyers, as long as Homebuyers are given a choice to finance on-site or bring their financing to the deal.
Q: Does the mayor want 2,000 Affordable Homes or 2,000 total homes with 40 percent being affordable? - Answer
A. Currently, Affordable Home Development Program is financing and tracking the number of Affordable Homes built.
Full Application FAQs
Q: Will the financial records submitted as part of our application be part of the public record under the Freedom of Information Act? - Answer
A: Yes. The City of Houston is a public governmental entity. The Affordable Home Development Program is funded with public taxpayer funds. For more information about the Texas Public Information Act, refer to the City of Houston website: https://www.houstontx.gov/pia.html and the Texas Public Information Act website
Q: Is the Affordable Home Development Program funded through federal government funds? - Answer
A: No, the Affordable Home Development Program is funded by a local Tax Increment Reinvestment Zone (TIRZ) bond.
Q: Are there any accessibility requirements? - Answer
A: All developments are subject to City of Houston accessibility requirements.
Q: If an Affordable Homebuyer receives a developer subsidy, how many mortgages would there be? - Answer
A: There are two separate loan agreements in the AHDP. The first is between the City and the developer which will be in the form of a no interest forgivable loan. The loan will be forgiven as the developer constructs and sells Affordable Homes. The second loan agreement will be between the City and each individual Affordable Homebuyer in the form of a secondary lien which will be forgiven over a five-year affordability period.
Q: Would the construction loans be forgiven be on a pro rata basis? - Answer
A. Yes. Additionally, each construction loan will be negotiated in an individual legal review process.
Q: Can you elaborate on what is considered a “proportionate amount of Market Rate homes”? - Answer
A. The proportionate number of Market Rate homes is relative to the neighborhood. The City would expect a higher percentage of Market Rate homes in high opportunity areas.
Q: Is there an average subsidy per home or average home cost developers should target? - Answer
A. The City anticipates a range of $75-$100K subsidy per home in high-to-mid opportunity neighborhoods and $25-$50K subsidy in low-to-moderate income neighborhoods. The City realizes that the subsidy amount is subject to change based on current comparable sales and the income level of the Homebuyer.
Q: Is the City asking for the site plan for each of the homes being built on the properties on which they will be built? - Answer
A. The City only requires for one site plan per model
Q: Are there any application templates available, such as for pro forma, construction budget or affirmative marketing plans? - Answer
A. Please contact your Relationship Manager for more information.
Q: Can you provide more information on the level of detail required on the detailed construction cost estimate, detailed construction schedule, development proforma (sources and uses of funds), and scope of work? - Answer
A. Please contact your Relationship Manager for more information.
Q: Can you let us know if there are any requirements for noise abatement? - Answer
A. All projects must adhere to City code and HCD minimum construction standards. The City will prioritize projects that demonstrate commitment to additional resiliency standards as detailed in the Full Application.
Q: Can the affordable buyers use the City’s down payment assistance or Houston Community Land Trust on top of the AHDP subsidy? - Answer
A. Affordable Homebuyers can not double-dip or duplicate benefits. For example, if the Market Rate sales price is $250,000 and the Developer drops the price to $200,000 to close the affordability gap. If the Homebuyer is preapproved for a $180,000 mortgage, they can use City of Houston down payment assistance for $20,000.
Q: Will Affordable Homebuyers need to use specific homebuyer education courses? - Answer
A. The City has not proposed specific homebuyer education courses, however, the City strongly encourages proactive community engagement. If you have partnered with a local agency or offer homebuyer education courses internally, please include this information in your application narratives.
Q: We are currently shovel ready but want to ensure any homes we build will count towards our Affordable Home deliverable in our potential contract. What is your advice on when to begin the construction phase? - Answer
A. During the legal review process, the City and developer will agree to an Affordable Home count based on the submitted pre-application. The City’s intention is to not slow down the construction cycle. The City can work with you to amend the Affordable Homes on your pre-application form if your project will yield at least 40 Affordable Homes. Please contact your Relationship Manager for more details.
Q: We submitted the pre-application before the design plan was completed and are concerned we may not be able to reach the number of Affordable Homes submitted. Is there a way we can modify the count? - Answer
A. The City can work with you to amend the Affordable Homes on your pre-application form if your project will yield at least 40 Affordable Homes. Please contact your Relationship Manager for more details.