Fourth Program Year
Action Plan
The CPMP Fourth Annual Action Plan includes the SF 424 and Narrative Responses
to Action Plan questions that CDBG, HOME, HOPWA, and ESG grantees must
respond to each year in order to be compliant with the Consolidated Planning
Regulations. The Executive Summary narratives are optional.

Summary of Regulatory Requirements

Section 91.320(a) through (g) Action Plan – General Requirements
The action plan must include the following:
(a)
Standard Form 424;
(b)
A concise executive summary that includes the objectives and outcomes identified
in the plan as well as an evaluation of past performance, a summary of the citizen participation
and consultation process (including efforts to broaden public participation) (24 CFR 91.300 (b)), a
summary of comments or views, and a summary of comments or views not accepted and the
reasons therefore (24 CFR 91.115 (b) (5)).
(c)
Resources and objectives. (1) Federal resources. The consolidated plan must provide a
concise summary of the federal resources expected to be made available. These resources include
grant funds and program income.
(2)
Other resources. The consolidated plan must indicate resources from private and non‐
federal public sources that are reasonably expected to be made available to address the needs
identified in the plan. The plan must explain how federal funds will leverage those additional
resources, including a description of how matching requirements of the HUD programs will be
satisfied. Where the state deems it appropriate, it may indicate publicly owned land or property
located within the state that may be used to carry out the purposes identified in the plan;
(3)
Annual objectives. The consolidated plan must contain a summary of the annual
objectives the state expects to achieve during the forthcoming program year.
(d) Activities. A description of the stateʹs method for distributing funds to local governments and
nonprofit organizations to carry out activities, or the activities to be undertaken by the state,
using funds that are expected to be received under formula allocations (and related program
income) and other HUD assistance during the program year, the reasons for the allocation
priorities, how the proposed distribution of funds will address the priority needs and specific
objectives described in the consolidated plan, and any obstacles to addressing underserved needs.
(e)
Outcome measures. Each state must provide outcome measures for activities included in
its action plan in accordance with guidance issued by HUD. For the CDBG program, this would
include activities that are likely to be funded as a result of the implementation of the stateʹs
method of distribution.
(f)
Geographic distribution. A description of the geographic areas of the State (including
areas of low‐income and minority concentration) in which it will direct assistance during the
ensuing program year, giving the rationale for the priorities for allocating investment
geographically. When appropriate, the state should estimate the percentage of funds they plan to
dedicate to target area(s).
(g) Affordable housing goals. The state must specify one‐year goals for the number of households
to be provided affordable housing through activities that provide rental assistance, production of
new units, rehabilitation of existing units, or acquisition of existing units using funds made
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available to the state, and one‐year goals for the number of homeless, non‐homeless, and special‐
needs households to be provided affordable housing using funds made available to the state. The
term affordable housing shall be as defined in 24 CFR 92.252 for rental housing and 24 CFR
92.254 for homeownership.
This Action Plan complies with the 24 CFR Parts 91 and 570, “Consolidated Plan Revision and
Updates: Final Rule.”
Program Year 4 Action Plan Executive Summary
The Executive Summary is required. Include the objectives and outcomes identified in the plan and an evaluation of
past performance (91.220).
Federal law and the regulations of the U.S. Department of Housing and Urban Development (HUD)
require the state of Arizona to prepare a Consolidated Plan in order to receive federal funding for certain
affordable housing and community development activities. The state of Arizona acts as a participating
jurisdiction through the Arizona Department of Housing (ADOH). The state’s Consolidated Plan is
prepared every five years, distributed widely and updated annually. In 2005, The State of Arizona
submitted, and HUD approved, the state’s Consolidated Plan: 2005 – 2009. This Plan consolidates into a
single document the planning and application requirements for:
•
•
•
•

CDBG
HOME
ESG
HOPWA

– the Community Development Block Grant (CDBG) Small Cities program;
– the HOME Investment Partnership program;
– the Emergency Shelter Grants (ESG) program; and
– the Housing Opportunities for Persons with AIDS (HOPWA) program.

HUD regulations at 24 CFR 91.320 requires a discussion of the resources, activities, distribution,
monitoring, and program‐specific requirements of the CDBG, HOME, ESG and HOPWA programs.
Although the regulations do not specify the organization of the section, the state’s Annual Action Plan for
2008 has been organized to provide a separate, full discussion of the requirements pertaining to each of
the four programs.
In fiscal year 2008, ADOH will manage and invest its allocation as follows:
•
CDBG –Community Development Block Grant program
The state may set aside up to two percent of the gross allocation plus $100,000 for costs associated with
administration of the program and may use up to one percent for providing technical assistance. This
adjusted total of $11,339,247 will be used to provide decent housing, provide suitable living environments
and enhance economic opportunities across the state. Fifteen percent of the adjusted total, $1,700,887,
will be allocated through the competitive State Special Projects application round. The Consolidated Plan
describes the method of distribution used for the regional allocation process: eighty‐five percent of the
adjusted total ($9,638,359) will be distributed through the Rural Council of Governments: (a) NACOG ‐
$2,199,425; (b) WACOG ‐ $2,836,059; (c) CAAG ‐ $2,322,992 and (d) SEAGO ‐ 2,279,884.

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•
HOME – the HOME Investment Partnerships program
The state will use $7,129,593 (includes $33,408 ADDI) to increase the availability/accessibility and
affordability of decent housing, provide suitable living environments and enhance economic
opportunities across the state.
Fifty‐eight percent of these funds $4,096,185) will support
Rental/Transitional Housing Development. Forty‐two percent of these funds ($3,000,000) will support
Owner‐Occupied Housing Rehabilitation. Ten percent of the $7,884,650 grant funds ($788,465) will be for
state administrative costs.
•
ESG – the Emergency Shelter Grant program
The state will use $873,061 to increase the availability/accessibility of suitable living environments and
decent housing by providing a wide range of supportive services to directed toward the prevention of
homelessness.
•
HOPWA – the Housing Opportunities for Persons with AIDS program
The state will use $191,000 to increase the availability/accessibility and affordability of suitable living
environments and decent housing through organizations that provide planning for housing needs,
education and access to essentially needed community resources.
Objectives
Investment will be made in activities that support the following objectives:
Rental Housing Objectives:
1.

Increase, through new development, the availability of affordable rental housing.

2.

Improve, through acquisition/rehabilitation, the quality of rental housing.

Owner Housing Objectives:
1.

Improve, through owner‐occupied housing rehabilitation programs, the quality of owner‐
occupied housing.

2.

Increase, through the Homes for Arizonans program (State Housing Trust Fund and ADDI), the
opportunities for low and moderate‐income households to become and remain homeowners
through homeownership assistance.

3.

Preserve homeownership, through Homes for Arizonans program (State Housing Trust Fund),
homebuyer education counseling.

4.

Preserve homeownership, using State Housing Trust funds, to support capacity building and
availability of foreclosure counseling services through the state.

5.

Preserve homeownership, by administering National Foreclosure Mitigation Counseling
Program ($1,333,069) through thirteen certified counseling agencies across the state.

Homeless Objectives
1.

Increase number of individuals moving from homelessness to transitional housing and to
permanent housing.
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Special Needs Objective
1.

Increase the range of supportive housing options and related services for special needs
populations.

Community Development Objectives
1.

Create, enhance, or sustain the operation of neighborhood facilities and improvements in areas
designated as strategic revitalization areas.

2.

Create, enhance, or improve the condition of housing units located in areas designated as
housing priority areas, or as a strategic revitalization areas.

3.

Reduce isolation of income groups through de‐concentration of housing for lower‐income
persons.

Economic Opportunity Objectives
1.

Increase technical assistance to Arizona’s communities through expanded private and public
partnerships.
Evaluation of Past Performance

The Community Planning and Development (CPD) division of the U.S. Department of Housing and
Urban Development (HUD) completed its review of the state of Arizona’s Consolidated Annual
Performance Report (CAPER) and concluded:
A copy of the complete Annual Community Assessment is provided in Appendix A.

Overview and Priorities
The Arizona Department of Housing evaluates performance, not just in terms of the efficiency with
which programs are administered, but also in terms of the collaboration and innovation with which the
department responds to changes in market demands. Since the writing of the Third Annual Plan, the
landscape for Arizona’s housing market has changed dramatically. Like the rest of the nation, Arizona
must confront the statewide foreclosures on the impact on Arizona’s citizens, neighborhoods and
communities.
In 2007 and in 2008, Arizona, along with the nation, will address the impact of foreclosures in its
communities, particularly urban communities. The Arizona Department of Housing will support
preservation of homeownership by increasing the availability of foreclosure counseling providers
through out the state. ADOH will administer through thirteen statewide foreclosure counseling agencies,
$1,333,069 of funding through the National Foreclosure Mitigation Counseling Program.
Developing incentives to participate in affordable housing programs continues to be a challenging goal
for the Arizona Department of Housing. Demand for the limited resources available through HUD’s
CDBG, HOME, ESG and HOPWA programs, have outstripped supply. The state’s Low‐Income‐Housing
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Tax Credit program has addressed the rise in costs by increasing the maximum allowed credits to
$1,000,000; however unit production will be adversely affected. The need to leverage and layer resources
in order to complete projects on time has led to an even greater competitive application environment.
Compounding the challenge will be restrictions in availability of customary funding sources, ranging
from conventional lending to the State Housing Trust Fund. The availability of funds through the State
Housing Trust Fund is expected to be significantly lower the both 2008 and 2009 program years.
Applications for ESG and HOPWA will continue to be let through a bid system. Applications for CDBG
funds will continue to follow the regional account method of distribution detailed in the Consolidated
Plan FY 2005‐2009. The application process for CDBG State Special Projects will reflect the planning
requirements of Arizona’s smart growth initiatives.
ADOH will continue to improve the development and evaluation of performance measures and
indicators. Leading with collaborative solutions, ADOH will work with units of local government to
continuously define appropriate indicators and incorporate data collection methodologies that reflect the
needs and uniqueness of its rural communities.
Like its local communities, ADOH has limited staff resources. The commitment to leverage resources
through greater opportunities to collaborate, however, remains an imperative. To address this issue,
ADOH proposes a reduction in the creation of paper‐intensive communication processes. Historically,
ADOH has produced a variety of manuals as a means of providing technical assistance. While source
manuals will not be altogether eliminated, updates to existing and future manuals will made available
through an expanded Information Bulletin process. By leveraging educational and regulatory resources,
ADOH will be able to expand its participation in community revitalization strategies.
As required, the state of Arizona’s Consolidated Plan:
•
assesses the State’ s affordable housing and community development needs;
•
analyzes the State’s housing markets;
•
articulates the State’ s goals, priorities and strategies to address identified needs; and
•
describes the actions the State will take to implement strategies for affordable housing and
community development.
The following Fourth Program Year Annual Action Plan for federal fiscal year 2008 updates that
Consolidated Plan by describing the methods the state of Arizona will use to distribute CDBG, HOME,
ESG and HOPWA funds. Through this plan, ADOH will demonstrate its commitment to assess current
market conditions and address the housing challenges inherent in being the fasting growing states in the
nation. Investment allocation decisions will focus on activities that close funding gaps and 1) support
activities in rural areas that have limited funding opportunities; 2) support projects where the need for
funds and the demand for the project design is demonstrated; 3) support projects identified as high
priorities in the Consolidated Plan; and, 4) invest in areas in decline and those with a disproportionate
concentration of low‐income and minority populations.
In addition, the Fourth Program Year Annual Action Plan for 2008‐2009 identifies the priorities to be
addressed with these funds and the actions which the State expects to take to address these priorities.

Strategic Priorities
Priority One: PRESERVATION
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Goals: Provide Decent Housing; Provide Sustainable Living Environments, Expand Economic
Opportunities

ADOH will support Rental and Owner‐Occupied Rehabilitation activities, Owner‐Occupied Emergency
Repair activities and Eviction Prevention Emergency Housing activities. ADOH will continue to use
CDBG, HOME, ESG, HOPWA and State Housing Trust Funds to invest in activities that help to retain
Arizona’s affordable housing stock, increase the availability of permanent housing that is affordable to
low‐income and moderate‐income individuals without discrimination and provide supportive housing
that includes structural features and services to enable persons with special needs to live in dignity.
Further, ADOH will invest in activities that empower low‐and moderate income persons in federally –
assisted and public housing to achieve self‐sufficiency. ADOH will invest in activities that assist
homeless persons to obtain affordable housing. ADOH will invest in activities that support the
prevention of eviction and foreclosures in order to prevent homelessness. ADOH will invest in programs
that improve the safety and livability of neighborhoods, revitalization of deteriorating neighborhoods,
restoring, enhancing and preserving natural and physical features of special value for historic,
architectural or aesthetic reasons and conserving energy resources. ADOH will invest in activities that
increase the availability of foreclosure counseling to all Arizonans. ADOH will provide education on fair
housing in compliance with the Fair Housing Act. ADOH will increase technical assistance and support
to encourage planning that incorporates economic development and smart growth initiatives.

Priority Two: HOMEOWNERSHIP
Goals: Provide Decent Housing; Provide Sustainable Living Environments
The reported shortfall in the overall state budget is expected to result in significant recapture of the State
Housing Trust Fund. Limited availability of State Housing Trust Funds and the markets reception to
new mortgage revenue bond deals will affect the state’s ability to expand downpayment and closing cost
assistance, homebuyer education counseling and mortgage revenue bonds financings. Further, the state
anticipates a reduction in owner‐occupied rehabilitation production through HOME because of reduced
funding through the State Housing Trust Fund. In order to sustain theses valuable programs, the state
will encourage partners and subrecipients to analyze current production goals and assessment processes
(waiting lists vs. targeted analysis, etc.). ADOH staff will work with its community partners to secure
minimal disruption to OOHR programs. Conversely, because of the existing oversupply of housing stock
in key markets throughout the state, ADOH will reduce its investment in new single family housing
development.
ADOH will continue to work in partnership with a variety of community partners, including the
Foreclosure Prevention Task Force, the Arizona Department of Financial Institutions and Neighborworks
in an effort to mitigate the effects of foreclosures on homeowners, neighborhoods and communities.
Priority Three: New Rental Unit and Single‐Family Home Development
Goals: Provide Decent Housing, Provide Suitable Living Environments
In prior years, HOME funds, in combination with State Housing Trust Funds, were used to invest in new
development of rental units and single family home units in order to increase the accessibility and
availability of permanent housing that is affordable to low‐and‐moderate income individuals. The
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cutbacks in the State Housing Trust Fund will directly impact the department’s ability to provide gap
financing for rental development. Due to the anticipated reduction in State Housing Trust Funds, the
department will have limited ability to stimulate sustainable design or to expand existing programs,
particularly existing owner occupied rehabilitation programs. The department will attempt to mitigate
the current conditions through increased partnerships with other state agencies and private partnership.
ADOH will encourage statewide planning that addresses the jobs/housing balance, local land use
planning goals, water, transportation and energy alternatives. ADOH will direct CDBG funds toward
activities that improve the safety and livability of neighborhoods, revitalization of deteriorating
neighborhoods, restoring, enhancing and preserving natural and physical features of special value for
historic, architectural or aesthetic reasons (community character) and economic development
Priority Four: Strategic Investment
Goals: Provide Suitable Living Environments
The department will maintain its current process for recognizing strategic revitalization areas in its
scoring and application evaluation processes. ADOH will encourage the inclusion of smart growth
initiatives in the CDBG State Special Projects funding application process.

Summary of Citizen Participation and Consultation Process
Public Hearing
A public hearing was conducted in the ADOH offices in Phoenix on April 25, 2008.
Advance notice was given for this hearing in the form of announcements published in a newspaper of
general circulation at least two weeks prior to the hearing; notice was also posted on the Department’s
website. The announcement provided information about the topic of the hearing, location, and how
comments could be submitted if the person(s) was unable to attend. The hearing was held in a
handicapped accessible location convenient to actual and potential beneficiaries. No requests for
interpreters were received.
The state is required to adopt a citizen participation plan that sets forth the state’s policies and procedures
for citizen participation in compliance with the provisions of 24 CFR 91.115.
The Arizona Department of Housing encourages participation in the development of the Consolidated
Plan, any substantial amendments to the plan, and the Performance and Evaluation Report (PER).
Participation of low and moderate income persons is encouraged – particularly those living in slum and
blighted areas and in areas where Community Development Block Grant funds are proposed to be used
and by residents of predominantly low and moderate income neighborhoods.
The public participation events for this Annual Action Plan represent the culmination of several years’
worth of experience in conducting similar events. The department’s website has become the primary
source by which the department shares and receives information.
All public hearing and forum announcements specifically states that comment were requested both on
the Annual Action Plan and the Citizen Participation Plan. The plan was made available in a format
accessible to persons with disabilities and those with limited English proficiency (LEP) upon request.
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Summary of Comments or Views
Accepted or not accepted and the reasons therefore (24 CFR 91.115(b) (5)
The Arizona Department of Housing received comments to its annual action plan. Those comments and
responses have been aggregated in two categories:
1.

2.

Communicating administrative and policy changes to funding processes
a. The requirement to match administrative expenses to direct project activity at the time of
set‐up
b. The integration of growing smarter initiatives through the CDBG State Special Project
competitive award
c. The use of web‐based tools and HUD‐developed collateral and technical assistance tools
over internally created manuals, and
Priorities for State Housing Fund (HOME and Housing Trust Fund)
a. The use of HOME funds for Tenant Base Rental Assistance
b. The availability of funds for gap financing of rental development
c. The potential to effect and protect the availability of affordable housing stock within the
context of foreclosure trends

ADOH Response
1. Communicating Administrative and Policy Changes to Funding Processes.
The department uses a decision making process that balances evidence based methodology with
forecasting principles. This decision making process includes publicly vetting the policies that determine
funding priorities and policies. Funding priorities for most programs administered by the Arizona
Department of Housing are vetted through the Consolidated Plan process, which describes the Method of
Distribution for HOME, CDBG, ADDI, ESG, HOPWA. This document is used to describe funding
priorities for the State Housing Fund as well. It includes the Annual Action Plan process too. Timing of
this process has been consistently administered: 1) The Consolidated Plan is developed every five years.
The next strategic plan will be completed on May 15, 2010. 2) The Annual Action Plan is updated
annually and is completed on May 15 each year in alignment with the strategic plan. 3) The
Consolidated Annual Performance and Evaluation Report (CAPER) are completed each year on
September 30. Moreover, the Public Housing Authority Annual Action (April 15 each year) Plan, and the
Low‐Income Housing Tax Credit Qualified Allocation Plan (by December 15 each year) is tested for
consistency with the Consolidated Plan. These are the primary processes by which the agency vets
funding priorities and policies.
Administrative procedures, however, are a function of business practices. The agency has an obligation
to HUD, HUD’s Office of Inspector General, the States’ Auditor General and others; we must comply
with a host of statutory and financial standards. While we can not guarantee participation in the
development of these administrative procedures; we can guarantee that those procedures will be
transparent and communicated as promptly as possible. As a State agency, we receive comments to any
department action at any time.

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The requirements of running the agency are balanced with the need to build relationships with our grant
recipients and stakeholders. Because we are serious about our commitment to these relationships, we
would be remiss if we did not respond to the agitation expressed by some toward the agency in the
execution of its business duties.
Since the mandatory incorporation of performance measures, the agency’s administrative processes have
migrated toward procedures that increase predictability of outcomes. This migration includes the
establishment of the pre‐award assessment process for CDBG (2006) funding; it includes the pre‐award
dialogue and negotiations process for State Housing Fund (HOME and Housing Trust Fund) grants. It
includes upgrading data collection, retrieval and reporting methodologies. It includes aligning funding
priorities with HUD’s national objectives and Arizona’s statewide objectives. It continues to recognize
the needs and priorities of local governments, but not at the exclusion of national and statewide planning
objectives, or fundamental accounting and compliance standards.
a) The requirement to match administrative expenses to direct project activity at the time of set‐up.
The recent administrative change, which requires the direct connection of CDBG administrative
expenses to the project, at the time of data set‐up, reflects Cost Accounting Standard Board
(CASB) recommendations. In all cases, the CDBG monitoring program confirms that
subrecipients are accounting for administrative expenses accurately. By recognizing the
administrative expense with the activity in our data base, the agency can insure the timely
closeout of completed activities. The fact that a cost requested in a budget is awarded, as
requested, does not automatically ensure a determination of allowability. Similarly,
unanticipated costs will not automatically be presumed unallowable. Moreover, cost savings will
not automatically be presumed unallowable. The purpose of this administrative change is to
establish that there is a clear and close relationship between the administrative expenses and the
objective of the activity. The process for modifying a budget in‐process will continue as a part of
the current grant processes. The department is in the business of underwriting grant application.
We understand that budget forecasts are estimates. Budget proofreads remain a viable way of
allocating costs, and our expectation is that every application will present its best forecast.
Moreover, all grant proposals, whether for CDBG, HOME, SHP, S+C, ESG and SHF are expected
to propose activities that result in measurable outcomes.
b) The integration of growing smarter initiatives through the CDBG State Special Project
competitive award. The challenges and opportunities presented by unprecedented population
growth have been felt in every Arizona community. In response to this dynamic, a working
group of the Governor’s Growth Cabinet was established to address the challenges and the
opportunities. Under Executive Order 2007‐05, the Governor’s Growth Cabinet prepared the
Arizona Smart Growth Scorecard to help State agencies “direct future discretionary funding to
applicant communities that are ‘growing smart,’ and help them assess whether or not they have
the right tools in place to do so.” “Communities and counties that are not able to advance smart
growth planning because they are challenged by limited resources, causing them to score lower
on the smart growth scorecard, will still be eligible for State discretionary funding.” (The Arizona
Smart Growth Scorecard, www.azcommerce.com). The Scorecard is continually being refined
and ADOH will be more responsive when the mechanics for accessing discretionary funding
(including CDBG SSP) are communicated. Information about smart growth and the Arizona
Smart Growth Scorecard can be found at www.azcommerce.com.
c) The use of web‐based tools and HUD‐developed collateral and technical assistance tools. ADOH
is required to develop policies and procedures for itself, as well as for the units of local
government that act as the State’s recipients [24 CFR 570.489(d)]. We certainly appreciate the
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regard for the program handbooks and especially for the CDBG handbooks. Our goal, is to
maintain a system that adequately ensures compliance with financial management and policy
requirements, The migration toward reliance on materials that are already available, directly
from our primary source of funding, HUD, allows us to be accurate and cost effective. So,
whenever uniform guidance exists through HUD manuals, handbooks, workbooks, notices,
guidelines etc, we may defer to these documents for guidance. Development of tools specific to
processes unique to Arizona’s programs, such as grant applications, NOFAs, etc will continue.
As we migrate toward use of more HUD approved/prepared materials, ADOH will centralize
links and reference sources whenever possible. Additionally, the agency will make the
Information Bulletin mechanism more robust.
We recognize that this direction is not popular. We hope that our partners will acknowledge the
need for this strategy. The Department of Housing has been tapped for significant financial
adjustments totaling $13.3 million in budget sweeps to three of our agency funds for the current
fiscal year. The largest sweep will be in the Housing Trust Fund. The reduction of $10.2 million in
our most flexible funding source will mean that no new funding commitments will be possible
before our annual transfer of funds from Unclaimed Property arrive in mid‐July. While no
existing HTF‐funded projects will be affected by this sweep, ADOH will remain unsure as to how
much HTF funding will be available in the next fiscal year until decisions on the FY2009 budget
are finalized.
The second fund affected by the legislative sweeps is the Housing Program Fund. The primary
source of our operating budget was cut by $2,775,900. This is a significant sweep to the agency’s
operating budget and will require prudent tightening of the agency’s operating expenses. We
believe it makes good business sense to rely on HUD approved collateral and web‐based
processes, as we weather the budget challenges together.
The third fund affected is the $364,000 sweep of the Housing Development Fund. Originally
created in the 1990s as a set aside to assist employees in the Department of Corrections, it is
sometimes referred to as the ‘Prison City Development Fund’. This amount represents a full
sweep to that fund’s balance and will effectively sunset this program.
The agency remains concerned about possible fund sweeps in FY2009 and thanks the Housing
community for its ongoing support of the agency’s budget.
2. Priorities for State Housing Fund (HOME and Housing Trust Fund)
There is an expectation by HUD that the State will assess and articulate unmet needs and develop
funding priorities that address those needs. Each year the State makes funding priority decisions based
on an analysis of available research. This analysis includes the review of unmet needs as defined in the
Consolidated Plan, a review of alternative sources of funds and an analysis of local market conditions.
Further, the State must certify that with respect to nonentitlement areas the State will engage in planning
for community development activities and consult with local officials in determining methods of
distributing funds. The State does this regularly by vetting public policy, and also through its staff
relationships, annual affordable housing conference, workshops and technical assistance.
a.

The use of HOME funds for Tenant Base Rental Assistance. HOME funds used for the
preservation of existing housing stock and the development of new rental housing are
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leveraged across several economic multipliers, including jobs, sales and revenues. For that
reason, the use of HOME funds for preservation and new development of rental housing will
continue as targeted in this program year. There is always an opportunity costs when
choosing to fund one priority over another priority. We will continue to review the use of
HOME for TBRA, while simultaneously encouraging the allocation of more funding for
permanent and transitional housing.
b. The availability of funds for gap financing of rental development the reduction in the
allocation of Housing Trust Fund and HOME will reduce funds available for gap financing.
Larger gaps in new and acquisition rehab developments are expected as the secondary
market responds to the mortgage foreclosure event. The agency recognizes that the some
developers have relationships and track records with syndicators and other financial partners
that will allow them to maintain prior year budget. The department will continue to support
those healthier projects.
c. The potential to effect and protect the availability of affordable housing stock within the
context of foreclosure trends. The department continues to research ways to mitigate the
economic impact of foreclosures and a tight credit market. Organizations such as the Local
Initiatives Support Corporation have explored opportunities to absorb housing stock with the
desire to make that inventory affordable to a variety of beneficiaries. Unfortunately, the
reduction in the State’s most flexible funding source (the Housing Trust Fund) limits options
for participation in this solution. We will continue to work with our housing partners to
explore alternatives.
Barriers to Affordable Housing 91.210 (e) and 91.215 (f)
As indicated by the stakeholder comments, barriers to affordable housing remain complex. The
complexities and challenges were noted in the state’s five‐year Consolidated Plan (please refer to FY
2005‐2009 State of Arizona Consolidate Plan, page 46, Barriers to Affordable Housing (91.210) (e) and
91.215 (f).) include (a) limitation of Natural Resources, (b) regulatory barriers and public policies, (c) lack
of knowledge of fair housing laws and (d) barriers on reservations/tribal lands. These barriers are
compounded by the effect of subprime lending and a tight credit environment.
The state continues to pursue those strategies outlined in its five‐year Consolidated Plan (please refer to
the State of Arizona Consolidated Plan, page 49, Strategy to Address Barriers).
Antipoverty Strategy
The Department of Housing’s approach for reducing the number of poverty level families includes:
(a) addressing the needs engendered by poverty; (b) being proactive in preventing poverty by promoting
job growth and increasing job training opportunities; (c) Increasing the supply and availability of decent,
safe, and affordable housing necessary for low income families ,and (d) increasing the effectiveness of
existing programs through better collaboration and increased efficiency of implementation
Recognizing the symbiotic relationship between affordable housing and human, social, and supportive
services, the Department has established – and continues to strengthen – partnerships with the Arizona
Department of Economic Security, the Community Services Administration, the Family Assistance
Administration, the Aging and Adult Administration, the Arizona Early Intervention Program, the
Arizona Department of Health Services, the Arizona Health Care Cost Containment System, the Arizona
Department of Veteran’s Affairs, and the Governor’s Office for Children, Youth and Families.
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Institutional Structure
Plan Implementation
The Arizona Department of Housing (ADOH) is a department of Arizona state government. ADOH is
headed by its Director, Fred Karnas, who oversees all activities related to funding/financing, operations,
education, technical assistance, industry and market analysis and the State Public Housing Authority.
ADOH produces a Consolidated Plan. The activities prescribed in the Plan are implemented by
governmental, non‐profit and for‐profit entities under contract with ADOH. Contracts are awarded
based on the ability of an entity to demonstrate the capacity to undertake eligible activities through a
written proposal process. ADOH works in conjunction with the four Council’s of Government to develop
a plan for the targeting and distribution of CDBG funds throughout the state.
Gaps in the Delivery System
The effectiveness of implementing activities by contracting with outside agencies is dependent upon the
capacity of the agencies conducting the activities and the expertise of ADOH staff in administering the
contracts. Effective and professional administration of contracts by ADOH Program Specialists is strength
in the delivery system. Each contract is assigned a Program Specialist to oversee the progress and
distribute funding. The Program Specialist is the primary point of contact for the implementing agency.
Gaps in the delivery exist in implementation.
Gaps in Public Housing
While the Arizona Department of Housing and the Arizona Public Housing Authority do not own or
manage any public housing, the state’s PHA has monitoring and compliance oversight through a contract
with HUD, of approximately 110 properties and 89 Housing Choice Vouchers.
Assisting Troubled Housing Agencies
The Arizona Department of Housing serves as the state public housing authority in accordance with
Arizona Revised Statutes 41‐3953 E and F:
E. The department is the designated state public housing agency as defined in the United States housing act of 1937
(42 United States Code sections 1401 through 1440) for the purpose of accepting federal housing assistance monies
and may participate in the housing assistance payments program. Federal monies may be secured for all areas of this
state subject only to the limitations prescribed in subsection F of this section.
F. For areas of this state where an existing public housing authority has not been established pursuant to section 36‐
1404, subsection A, the department acting as a public housing agency may undertake all activities under the section
8 tenant‐based rental housing assistance payment program, except that the department shall not undertake a section
8 tenant‐based rental housing assistance payment program within the boundaries of a city, town or county unless
authorized by resolution of the governing body of the city, town or county. If the department accepts monies for a
section 8 tenant‐based rental housing assistance payment program for areas of this state where an existing public
housing authority has been established pursuant to section 36‐1404, subsection A, the department shall only accept
and secure federal monies to provide housing for the seriously mentally ill or other disabled populations. The

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department may accept and secure federal monies for undertaking all contract administrator activities authorized
under a section 8 project‐based rental housing assistance payment program.
ADOH will continue to review the plans of housing agencies for consistency with its Consolidated Plan,
but it does not monitor or have oversight of established housing agencies.

Amendments to the Consolidated Plan
Under the final Consolidated Plan regulations, the state is required to advise HUD of substantial changes
to the state’s Consolidated Plan. The Arizona Consolidated Plan represents the best efforts possible to
incorporate citizen comments and concerns in the entire planning process.
Criteria for amending the Consolidated Plan and/or the disbursement or targeting of funding would
include changes in activities or the method of distribution, either reported herein or unforeseen, and
changes in beneficiaries or subscribers that could reasonably be expected to change the delivery of
services described herein. By definition, a substantial amendment to the Consolidated Plan would result
from a change in activity from eligible to ineligible, or vice versa, a change from formula allocation to
competitive award of funds, or vice versa, or from a change in the method of distribution of funds if said
change will cause an increase or decrease in the original allocation mix over 35%.
The state will provide interested parties with reasonable notice through a public newspaper(s) with
statewide circulation and an opportunity to comment on substantial amendments. Comments will be
received for a period of not less than 30 days, as identified in the public notice, on the substantial
amendment before the amendment is implemented. Furthermore, the notice will clearly provide the
name and address of the individual responsible for receiving these comments. Reasonable notice will be
given to interested parties for non‐substantial amendments through a mailing to current grantees and by
posting on the Department’s website. The state will consider any comments or views of interested parties
received in writing, if any, in preparing the substantial amendment to the Consolidated Plan.
In PY 2006, the application process for funds accessed through the State Housing Fund, (State Housing
Trust Fund match with HOME) became competitive. This did not constitute a change or substantial
amendment to the Consolidated Plan. Notice of this eventuality was addressed in the State Housing
Fund Program Summary and Application Guide: “In the event that insufficient funds are available to
fund all applications that are received for a specific activity or in a geographic area, competitive funding
criteria may be utilized to make awards.”

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2. Resources
Identify the resources from private and public sources, including those amounts allocated under HUD formula
grant programs and program income, that are reasonably expected to be made available to address the need identified
in its plan, explaining how Federal funds made available will leverage resources from private and non‐federal public
sources, and a description of how matching requirements of HUD programs will be satisfied. Where deemed
appropriate by the state, it may indicate publicly owned land or property that may be utilized to carry out the plan.

CDBG

Section 91.320(k) (1) Community Development Block Grant (CDBG) Program
(i)
“The method of distribution shall contain a description of all criteria used to select
applications from local governments for funding, including the relative importance of the criteria where
applicable The action plan must include a description of how all CDBG resources will be allocated among
all funding categories and the threshold factors and grant size limits that are to be applied. The method of
distribution must provide sufficient information so that units of general local government will be able to
understand and comment on it, understand what criteria and information their application will be judged,
and be able to prepare responsive applications. The method of distribution may provide a summary of the
selection criteria, provided that all criteria are summarized and the details are set forth in application
manuals or other official state publications that are widely distributed to eligible applicants. HUD may
monitor the method of distribution as part of its audit and review responsibilities, as provided in
570.493(a) (1), in order to determine compliance with program requirements.
(ii)
If the State intends to aid nonentitlement units of general local government in applying
for guaranteed loan funds under 24 CFR part 570, subpart M, it must describe available guarantee
amounts and how applications will be selected for assistance. If a State elects to allow units of general local
government to carry out community revitalization strategies, the method of distribution shall reflect the
Stateʹs process and criteria for approving local governmentsʹ revitalization strategies.”

The ADOH CDBG Program Action Plan for Program Year 2008‐2009 will address the needs and
implement the objectives and priorities set forth in the State’s 2005‐2009 Consolidated Plan for affordable
housing and for non‐housing community development needs.
To that end, the ADOH will provide loans, grants or technical assistance for developing projects that
provide decent and hazard‐free affordable housing, increase access to safe drinking water, provide
proper disposal of household wastewater, provide access to community services in local facilities and
stimulate economic development.
In support of the State’s priorities, the CDBG Program will:
•

continue to support a mix of rehabilitation, renewal, infrastructure improvement and
construction of public facilities to support the availability of affordable housing and community
development

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•

revitalize and revive the vibrancy of our communities which will enhance the quality of life for
the people of Arizona;

•

encourage and assist local governments to develop comprehensive public facility improvement
strategies which support viable communities and primarily benefit low‐ and moderate‐income
persons;

•

develop and implement strategies which facilitate the coordination of CDBG funding with other
federal/state/local community development resources.

•

develop and implement strategies that enhance quality growth and define performance criteria
for determining the success of local land use planning goals.

CDBG Eligible Applicants
The state CDBG program is available to eligible units of local government, including cities, towns, and
counties in rural areas. For purposes of this program, rural areas are those located outside of entitlement
jurisdictions (those that receive CDBG funds directly from HUD). Entitlement jurisdictions in Arizona
include all of Maricopa and Pima Counties, the cities of Flagstaff, Prescott, and Yuma.
State Method of Distribution
The total amount of CDBG funds available for project in FY 2008 is $11,793,037, a decrease of $167,134
over prior year. No program income or carryover funds are available therefore none are included in this
amount. Federal Law allows the state to retain 2% ($235,860) plus $100,000 of its annual CDBG allocation
for program administration. The state must provide a non‐federal match for the 2%. The match is to be
documented at the same time that CDBG funds are drawn down for the administrative expenditures of
the state above $100,000. The $11,793,037 in federal CDBG resources available to the state will be
distributed as follows:
ADOH Administration ‐ $453,790. This includes $117,930 (1% for technical assistance) and $335,860 (2%
plus $100,000 for administration). This amount does not include the required 2% administration match of
$235,860.
ADOH will provide the $235,860 in non‐federal matching funds from two sources. These include “hard”
match funds, i.e. state funds used to pay salaries and other operating expenses of the CDBG program and
“in‐kind” or “soft” match funds which represent staff time devoted to the CDBG program by individuals
whose salaries are paid from non‐federal sources. These individuals, who include those located in the
Information Technology Division, Personnel, Procurement, Customer Liaison, the Deputy Director, and
Programs Administrator all track their time on departmental time sheets.
CDBG‐Eligible Activities
Eligible activities are generally found in Section 105 of the HUD Act of 1974, as amended and 24 CFR Part
570.482, as amended. CDBG funds can be used for a wide range of activities. Activities eligible for
funding under this Action Plan fall under the main funding categories of: 1) housing (both owner‐
occupied and rental rehabilitation, new housing construction undertaken by a CBDO or certified
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nonprofit, and homeownership assistance); 2) public improvements (water, wastewater, streets); 3) public
facilities (parks, community/senior centers, removal of architectural barriers); 4) public services (e.g.,
childcare, and transportation); and 5) planning.
Funding allocations for the Regional Account (RA) and the State Special Project (SSP) competitive
funding round distributed by the state CDBG program are outlined below.
CDBG Regional Account
The CDBG Regional Account (RA) consists of 85% of the state of Arizona allocation from HUD. The RA
is distributed on a non‐competitive basis to all non‐metropolitan cities, towns, and counties in Arizona.
All distribution of state CDBG funds is to be accomplished through an allocation system. Each non‐
metropolitan Council of Government (COG) region creates a Regional Council approved Method of
Distribution (MOD) which will be submitted to ADOH by November 30th for review. The MOD contains
a multi‐year schedule indicating how CDBG allocations are to be distributed such that all eligible
communities within each respective COG region will receive funding. The multi‐year schedule should
include the funding years that each community in the region will receive funds and estimate the amount
to be available. This will allow each community to plan its CDBG projects in advance. Deviations from
rotation schedules whereby communities trade allocations is allowed but must be accomplished prior to
September 30th. ADOH will distribute the final MOD to recipient communities by December 30th.
ADOH has the final authority to determine the MOD for the state. The MOD approved by ADOH will be
included in the Annual update of the Consolidated Plan, which is subject to a citizen participation
process.
The Regional Account (RA) is divided into four sub‐accounts, one for each of the non‐metropolitan COG
areas. Regional Account allocations are as follows:
Central Arizona Association of Government (CAAG): Gila and Pinal Counties. $2,322, 992;
Northern Arizona Council of Government (NACOG): Apache, Coconino, Navajo, and Yavapai Counties.
$2,199, 425;
South Eastern Arizona Government Organization (SEAGO): Cochise, Graham, Greenlee, and Santa Cruz
Counties. $2,279, 884;
Western Arizona Council of Government (WACOG): La Paz, Mohave, and Yuma Counties. $2,836, 059.
ADOH will announce CDBG funding levels by the end of the first quarter of each year for both the
Regional Account and the State Special Project round via its website.
All applications for the Regional Account are due to ADOH by 5:00 P.M. on the following dates.
NACOG and SEAGO – June 1, 2008.
WACOG and CAAG – July 1, 2008.
ADOH will review all applications and make final award determinations within 60 days of receipt,
whenever possible.
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CDBG Regional Account Recipient Community Responsibility
While CDBG money is scheduled to be provided to all eligible recipient regional account communities
according to the Method of Distribution of the state, an actual award of CDBG funds is contingent upon
passing the threshold and completeness review. Applicants must propose projects that are financially
viable, necessary and feasible, ready to start, conform to compliance standards and result in benefit.
Projects must adhere to contracted timeliness parameters. Projects must comply with the priorities
communicated through this annual action plan. Benefit to low‐and moderate income persons, preventing
or eliminating slum or blight, or meeting other urgent community needs must be measurable by the end
of the approved contract timeframe.
Though the state does not define minimum and maximum investments, outcomes of activities must
clearly demonstrate program results at the HUD national level, which is the standard required by OMB’s
program assessment process.
As indicated in the 2005‐2009 Consolidated Plan, back‐up applications will not be accepted.
Applications reflective of the citizen participation process may be submitted only at the time of funding
for that program year. The Arizona Department of Housing will strive to make available technical
assistance and support, both through its partners in the Councils of Government and through its staff.
Further, through its pre‐award assessment process, ADOH will strive to negotiate and resolve any
outstanding issues that may be material to an award of funds decision. If issues material to the decision
can not be resolved, the recipient community will receive a Notice of Appealable Agency Action (See
Appendix B). It is the responsibility of each recipient community to submit a CDBG application with a
request of funding equal to or less than the amount of the projected allocation in the MOD.
State CDBG activities may serve beneficiaries residing in areas adjacent to nonentitlement area
jurisdictions
The Arizona Department of Housing (the State) allocates CDBG funds to projects and programs that
benefit residents of nonentitlement areas. A nonentitlement area is defined by HUD as an area which is
not a metropolitan city or part of an urban county. In Arizona, this primarily means the communities
located outside of the Phoenix and Tucson MSAs. Many of these communities are adjacent to entitlement
areas and Indian reservations.
In reviewing a nonentitlement area unit of local government’s application for state CDBG funding, the
State must determine that the applicant has identified the community development and housing needs of
its nonentitlement area residents, and has demonstrated that the activity(ies) will meet those needs. 2
The State recognizes that CDBG activities that address the community development and housing needs
of nonentitlement area residents may also benefit the residents of Entitlement communities or residents of
Indian reservations1. In some cases, the most feasible or practical location for an eligible CDBG activity
(such as for reasons of public transportation accessibility, maximizing accessibility to the greatest number
of nonentitlement area beneficiaries, operational cost effectiveness, land/building availability, or
engineering considerations) may be located on tribal land or in an Entitlement community.
Therefore, the State offers the following clarification to the current CDBG funds allocation process:

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1.

2.

3.

4.

5.

The Arizona Department of Housing will review applications and allocate funding for CDBG
activities consistent with the priorities, objectives and the method of distribution as described in
its 2005 ‐2009 Consolidated Plan (and as updated in its Annual Action Plans).
The Arizona Department of Housing can allocate funds only to units of local government of
nonentitlement areas. Funds are awarded through an application process described in the 2005‐
2009 Consolidated Plan (and as updated in its Annual Action Plans).
If a proposed activity will be initiated, conducted, operated, constructed/rehabbed, repaired,
replaced, or in any manner located in an Entitlement area or on tribal lands, the application made
by the nonentitlement area unit of local government must demonstrate benefit to residents of the
nonentitlement area. Such documentation may include primary research, such as
citizen/community surveys and market studies that demonstrate that the activity will meet the
needs of the residents of the nonentitlement area.
If a proposed activity will be initiated, conducted, operated, constructed/rehabbed, repaired,
replaced, or in any manner located in an Entitlement area or on tribal lands, the nonentitlement
unit of local government must demonstrate that no other alternative will provide greater benefit
to the residents of the nonentitlement area.
Financial participation must be in proportion to the share of expected benefits residents will
receive. Additionally, evidence of affirmative outreach to nonentitlement area residents must be
demonstrated in the marketing and communication plans.

Administrative Expenses Must Directly Relate to Project Activities
CDBG funds may be used to pay reasonable program administration costs related to the planning and
execution of eligible activities funded in whole or in part with State CDBG. Activities eligible under this
category include Citizen Participation costs; Fair Housing activities; staff and overhead costs for project
delivery; and grant administration.
A maximum of 18% of the aggregate total of all activities for which funding is requested can be charged
to general administration and to eligible planning activities. If a community is implementing multiple
activities, ADOH will enter into individual contracts for each activity; and each of the contracts will
contain the general administration funds appropriate for and specific to that activity.
ADOH encourages all communities to apply for a reasonable and appropriate amount of administrative
funding based on the activity type thru completion of the application budget. ADOH also encourages
communities to estimate a sufficient dollar amount for TAAP fees to allow the flexibility of increasing the
level of assistance from the COG for both compiling the application and administering the project.
Administrative funding will be awarded thru the application and pre‐award assessment process.
Communities must submit annual audits whether or not they received CDBG funds during the past year.
This assists the Department of Housing in determining whether technical assistance and guidance should
be offered to the community aiding it to implement a compliant CDBG project and avoiding future audit
concerns.
Administration funds may be used by local governments and sub‐recipients to pay for the proportionate
share of an annual audit attributable to the expenditure of CDBG funds as documented by a written cost
allocation plan.

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CDBG Redistribution of Funds
If a community that is scheduled to receive funding chooses not to participate, or does not submit a
viable and compliant application to ADOH, the allocation for that community will be returned to the SSP.
If the funding amounts scheduled for a community exceeds funding requests included in the application,
the balance will be redistributed to the SSP fund.
ADOH will distribute any recaptured funds or de‐obligated funds. These funds will be distributed as
follows: (The following language must be included in all MODs submitted to ADOH)
Recapture is the action of removing funds from a contract due to one of the following two types of
circumstances: 1) Recapture for non‐compliance whereby ADOH determines that CDBG funds will be not
used in compliance with the contract between ADOH and the recipient or in compliance with federal
regulations; and 2) Recapture for non‐performance whereby recipient fails to perform according to the
performance criteria outlined in the contract scope of work, the contract schedule, and/or the
performance criteria outlined in the text of the contract with ADOH.
Recaptured funds will return to ADOH to be redistributed through the State Special Projects account to
the applicant next in line for funding.
De‐Obligated Funds
De‐obligation is the action or removing funds from a contract due to one of the following: 1) the scope of
work is completed using less CDBG funds than anticipated and leaving an unexpended balance; 2) the
original allocation was a loan and the loan was paid back; 3) an activity was changed or cancelled (for
reasons other than performance) resulting in excess funding; 4) program income is received that is not
programmed for use.
De‐obligated funds may be rolled into an existing or new contract of the same funding year from which
the funds will be de‐obligated if they can be put under contract within 60 days and used quickly. The
community must have a positive performance record to be granted this approval.
If the above is not possible, the funds will return to ADOH to be redistributed through the State Special
Projects account to the applicant next in line for funding.
CDBG State Special Projects
All communities eligible to receive funding from the state CDBG program are eligible to apply for State
Special Projects. Each community is encouraged to submit one application. Multiple applications may be
submitted from one community if the applications are prioritized. The application process for CDBG
State Special Projects will reflect the planning requirements of Arizona’s smart growth initiatives.
Any eligible CDBG activity may be undertaken with SSP funds. The only difference is that the SSP is
competitive and all applications must demonstrate the project is ready to implement immediately.
ADOH may use a portion of the SSP to create a contingency account available to assist with RA and SSP
project shortfalls.
Applications submitted must propose all activities pursuant to 24 CFR 570 that are ready to begin
implementation immediately with environmental review requirements completed, Release of Funds
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issued, land control secured, planning, design, and permitting complete, and all other related upfront
issues resolved.
CDBG SSP Application Deadline
Notification of Funds Availability will be announced.
CDBG SSP Selection of Project Awards
Projects will be selected for SSP funding through a competitive process in which applications are scored
by a rating and ranking system that includes specific criteria to be reviewed. The highest scoring
applications within each priority category will be awarded prior to awarding projects in subsequent
priority categories. Scored applications will be kept on file for one year and the next highest scoring
applications will be funded if funding becomes available through recapture or de‐obligated CDBG funds.
The following criteria will be used to select project awards: 1) the extent to which the project meets the
needs for public services, public works, community facilities and housing ; 2) the extent to which
equipment or a project improves, upgrades, or rehabilitates facilities, housing or neighborhoods; 3) the
extent to which a project benefits a large segment of the population specific to the type of assistance; 4)
the extent to which the project provides a direct, provable benefit to low‐income and special needs
persons, especially, how effectively the proposal proves that the need for the project exists; 5) the extent
to which project costs been carefully estimated and documented; 6) the extent to which the project is
ready to begin; 7) the extent the project leverages other committed money into the service, facility or
housing especially local private and governmental investment (to include salaries,
engineering/architectural services, etc) that CDBG will not be billed for; 8) the performance of the
applicant on past contracts and the capacity of in house or contracted staff to implement the project; 9)
the extent to which other projects are affected; 10) the extent to which a project will generate secondary
benefits such as continued investment (especially private), increase in economic activity, decrease in
crime, and increase in safety; 11) the extent to which the applicant demonstrates that improvements can
be maintained in the future.
CDBG Urgent Needs Grant Applications
When proposing an activity that meets the urgent need national objective, the applicant must document
that it has no other financial resources available to meet the need. Additionally, all activities that propose
to meet the urgent need national objective must meet community development needs that: 1) have a
particular urgency; 2) pose a serious, immediate threat to the health or welfare of the community; and 3)
and are of recent origin.
Eligible activities are generally found in Section 105 of the HUD Act of 1974, as amended and 24 CFR Part
570.482, as amended. CDBG funds can be used for a wide range of activities. Activities eligible for
funding under this Action Plan fall under the main funding categories of: 1) housing (both owner‐
occupied and rental rehabilitation, new housing construction undertaken by a CBDO or certified
nonprofit, and homeownership assistance); 2) public improvements (water, wastewater, streets); 3) public
facilities (parks, community/senior centers, removal of architectural barriers); 4) public services (e.g.,
childcare, and transportation); and 5) planning.

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CDBG Colonias Set Aside
HUD mandates the state expend at least 10% of its CDBG project allocation in the areas designated as
colonias. The colonias allocation is $1,133,925. All activities in a self‐determined or CDBG‐determined
Colonia will be considered to meet this set‐aside. If there are insufficient funds requested for colonias
from the RA, colonias SSP applications will be given priority‐funding consideration.
CDBG Projected Goals for FY 2008‐2009
In conjunction with state priorities, ADOH proposes to fund approximately fourteen (14) projects
associated with housing rehabilitation activities. Since the Consolidated Plan submission in 2005, the
capacity of recipient communities and non‐profit organizations to provide housing rehabilitation service
has expanded. While housing rehabilitation service providers are concentrated in larger communities
and within the technical staffs of the Councils of Government, Arizona’s providers have demonstrated a
willingness to share resources.
ADOH proposes goals for funding eight (8) Public Improvement projects, seven (7) Public Facilities, and
eight (8) Public Services. These funding categories have high costs associated with them resulting in a
fewer number of projects but a higher impact on the number of beneficiaries.
Arizona’s rapid growth has resulted in an explosion of population growth. Often, commensurate
infrastructure is lacking. ADOH will continue to encourage recipient communities to use CDBG funds as
leverage in expanded planning activities.

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HOME
HOME Method of Distribution
The state expects to receive $7,918,058 HOME resources, including $33,408 in American Dream
Downpayment Initiative (ADDI). ADOH will implement the American Dream Downpayment
Initiative through the existing ADOH Homes for Arizonans Program.
HOME match liability is expected to be met through state dollars invested in the Homes for
Arizonans Program. The HOME program match liability is 25 percent (statutory requirement) of
actual project expenditures during the program year or approximately $1.8 million. Match will
be provided from the following two sources – the Homes for Arizonans Program and match
carried over from previous years. The Homes for Arizonans Program is expected to generate up
to $4 million of match. This program provides downpayment and closing cost assistance to first
time homebuyers in the rural areas of the State. Additionally, the State has $12.7 million in match
that was carried over from the previous years. The Homes for Arizonans program has been an
essential component in the stateʹs ability to far exceed the HOME programʹs minimum match
requirements.
The state intends to make HOME funds available statewide. Applicants for most HOME activities
may also apply for State Housing Trust Fund resources through the same application. The
following approximate funding objectives are for resource targeting only. Funding decisions will
be made on the strength of the funding proposals and the order in which they are received.
HOME Geographic Funding Objectives
Statewide CHDO set‐aside: $1,182,698
Metro Area (Maricopa and Pima Counties): $1,344,727
CAAG Region (Gila and Pinal Counties): $1,105,364
NACOG Region (Apache, Coconino, Navajo and Yavapai Counties): $1,575,526
SEAGO Region (Cochise, Graham, Greenlee and Santa Cruz): $660,649
WACOG Region (La Paz, Mohave and Yuma Counties): $1,227,221
American Dream Downpayment Initiative: $33,408
HOME Activity Funding Objectives
Rental Housing, including HOME CHDO set‐aside, LIHTC gap financing; transitional housing
and emergency shelter development. $4,096,185
American Dream Downpayment Initiative: $33,408
Owner‐occupied Housing Rehabilitation: $3,000,000
HOME Application Process
The state makes available HOME funds through an application process. Notification of funds
availability will be announced.
Only applications that meet completeness requirements and minimum thresholds are considered
for funding. Minimum completeness requirements include, but are not limited to an ERR

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determination letter and satisfactory compliance history, The minimum thresholds for HOME
applications program include, but are not limited to, responsiveness and readiness to proceed.
Applications that meet minimum thresholds are underwritten based on the following criteria as
relevant to the proposed activity: 1) market need/demand; 2) management/capacity; 3)
budget/financial analysis; and 4) program design. Once it is determined that an application
meets minimum underwriting standards, the application and underwriting results are forwarded
to a funding review panel for final analysis and recommendation. The funding review panel is
comprised of ADOH staff, including program administrators, risk assessors, administrators, the
assistant deputy directors of programs and operations, the deputy director and the director.
The Consolidated Plan for PY 2005 contained an explanation under which a rating system would
be employed: “When insufficient funds are available, either geographically or for an activity,
competitive scoring criteria are used. If competitive scoring is necessary, the following scoring
criteria will be used: very‐low income and priority population targeting, and project readiness.”
During PY 2006, requests for funds exceeded funds availability. HOME funds, as well as State
Housing Funds remain accessible only through a competitive process.
The actual geographic distribution of resources will be based on the number and quality of
applications received. The state will not hold funding available or make any concessions with
regard to program thresholds or underwriting in order to guarantee the funding of activities
within a specific geographic region.
ADOH will not utilize HOME resources for tenant‐based rental assistance or for homeownership
assistance in the form of downpayment/closing cost or equity contributions, with the exception of
the American Dream Downpayment Initiative set‐aside. Downpayment and closing cost
homeownership assistance programs are funded through the State Housing Trust Fund.
HOME CHDO Distribution
The state will distribute HOME resources to recipients and Community Housing Development
Organizations (CHDOs) through the application process outlined above. In accordance with
§92.201(b)(1) of the HOME regulations, geographic funding objectives have been established to
ensure, to the extent possible, an equitable geographic distribution of funds.
HOME Forms of Investment
Investment will be provided as grants and loans.
HOME Resale and Recapture Provisions
The Federal HOME Program requires either a resale or recapture provision as outlined in 24 CFR
92.254 of the HOME rule. ADOH has chosen to use the recapture provision for HOME and/or
matching funds used to assist eligible homebuyers.
Assistance provided by ADOH shall be in the form of a non‐interest bearing, deferred payment
loan secured by a deed of trust naming the state of Arizona or its designated representative(s) as
beneficiary. The assistance is completely forgiven upon completion of the applicable
affordability period.

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If the housing does not continue to be the principal residence of the homeowner for the duration
of the affordability period, the assistance will be repaid in its entirety from the net sale proceeds.
If the net sale proceeds are not sufficient to recapture the full amount of assistance plus enable
the homeowner to recover the amount of their downpayment, ADOH will share the net proceeds.
The net proceeds are the sales price minus loan repayment (other than ADOH funds) and closing
costs.
ADOH will permit the homeowner to recover the homeowner’s initial downpayment before
recapturing ADOH assistance. The amount of ADOH assistance that is subject to recapture is
based on the amount of assistance that enabled the homeowner to purchase the dwelling unit.
This includes any assistance that reduced the purchase price from a 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).
In the case of foreclosure or transfer in lieu of foreclosure, the primary lender is allowed to repay
a recapture amount based on the process described above, as applied to the net proceeds after
foreclosure, and take the property without the affordability restrictions.
HOME Security Instruments
Recapture restrictions shall be executed through one or more of the following instruments,
depending on the type of first‐mortgage instrument: 1) Land Use Restriction Agreements and/or
deed restrictions filed against the property acquired by the assisted homebuyer; 2) Deed of Trust
and Promissory Notes consistent with the non‐interest HOME‐financed loan filed on the
property acquired by the assisted homebuyer; and, 3) a due‐on‐sale Promissory Note and Deed
of Trust consistent with the non‐interest bearing State Housing Trust Fund.
Affirmatively Marketing, Fair Housing and Minority Outreach (HOME Investments)
ADOH is committed to making every effort to ensure that HOME investments conform to
affirmative marketing practices. The State’s guidelines may be found in Appendix E.
ESG
Emergency Shelter Grant (ESG) Method of Distribution
The ESG program is funded under the McKinney‐Vento Homeless Assistance Act. The Arizona
Department of Economic Security (DES) is the HUD grantee for ESG funds and is the responsible
administrative agency. The primary intent of ESG is to provide fund for renovation/rehabilitation
and operating expenses for homeless shelters. ESG funds in the amount of $873,061 have been
allocated to the state of Arizona. Up to 5% ($43,653) will be retained for administrative costs. The
DES will award contracts every five years through a competitive request for proposal (RFP)
process. Proposals will be reviewed by a panel comprised of internal staff and external members.
Proposal will be assessed using a rating system; evaluation criteria is published in each RFP,
which may include service methodology, experience and expertise, cost/price and conformance
to RFP requirements/instructions. The ESG prevention funding will be allocated through
contracts with Community Action Agencies (CAAs) that are designated by law to receive all DES
funding non‐competitively. The funding will be allocated to the CAAs providing services in
rural counties through a defined formula in which 90% of the funds are distributed on the
percent of person at or below 125% of poverty and 10% based on unemployment. After awards
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are received, and for the duration of the grant, each facility will be monitored by DES.
Periodically, funds will be distributed through intergovernmental agreements with local
governments for prevention and transitional housing services. By these means, the broadest
coverage is ensured throughout the state.
ESG Match
ESG funds require a one‐to‐one (100%) match. Federal regulation allows the first $100,000
expenditure of ESG to be unmatched. The total minimum match that will be provided for the
ESG grant is $773,061 for a total program resource of $1,646,122. In previous years the minimum
match requirements have been exceeded. Matching funds are provided in a variety of ways
ranging from in‐kind salary matches to volunteer labor.
Selected applicants least apt to be able to provide match will have their match requirement
reduced by a negotiated amount. A total of $100,000 of match will be waived as allowed by
federal regulation.
ESG Geographic Funding Objectives
Updated budgets, certifications if needed, and descriptions of activities to be funded by ESG will
be submitted to the DES, Office of Community Partnerships and Innovative Practices (CPIP) for
the renewal period. The updated information submitted will be reviewed and approved, where
necessary to assure compliance with ESG requirements.
Renewal contracts with governmental entities and nonprofit organizations will begin July 1.
ESG Activity Funding Objectives
The following funding strategies apply: 1) continue funding at current levels for shelter services,
case management and outreach which is approximately 63% in Maricopa County, 8% in Pima
County, 5% in Pinal County, 11% in Mohave, Yavapai and Yuma Counties and 13% in Navajo,
Cochise and Coconino Counties; 2) funding of eviction prevention services up to the maximum
30% of the allocation; 3) funding of staff costs in shelter facilities is not planned.
DES intends to utilize up to 5% of the allocation for administration to help mitigate the costs of
operating the ESG program.
The ESG funds, upon award, will be contracted and utilized within the state fiscal year to operate
emergency shelter and transitional housing facilities and make homeless prevention and essential
services available in order to alleviate the urgent and growing needs of people who are homeless.

HOPWA
The state allocation for HOPWA funds is $191,000. A total of $19,100 of these funds will be used
for administration. Three percent ($5,730) will be used by the Arizona Department of Housing
and 7% ($13,370) will be used by project sponsors. Any previously uncommitted funds will be
combined with this.

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ADOH will contract with two organizations to administer the HOPWA program within six of he
thirteen rural counties.

Mohave County Community and Economic Development (MCCED)
Mohave County Community and Economic Development (MCCED) creates and enhances viable
and livable communities for Mohave County. The Community & Economic Development
Department serves Mohave County employers, employees and residents by efficiently and
effectively coordinating available Federal, State and Local resources to maximize community,
workforce and Economic Development by seeking
•
•
•
•

Affordable housing for Mohave County residents
Community development projects for low and moderate income communities
Skilled and available workforce for the economic community
Business services and comprehensive information source for business and economic
development through the One‐Stop Centers
• Business expansion and retention programs
• Regional collaboration and partnership in workforce, community and economic
development
Northland Cares
Northland Cares, a non profit organization, directly administers HOPWA in five (5) rural areas
within the balance of the state jurisdiction ‐ Apache, Coconino, Gila, Navajo, and Yavapai
Counties. Similar to the aforementioned HOPWA project sponsor Northland Cares provides the
same housing activities; short‐term emergency housing and supportive services.
Similar to the aforementioned HOPWA project sponsor Northland Cares provides the same
housing activities; short‐term emergency housing and supportive services. Northland Cares
coordinates directly with the case management units administering Title II Ryan White funding
county public health department in the above referenced counties as referral sources.

Supportive Housing Program and Shelter plus Care Method of Distribution
The state will coordinate and serve as the applicant for HUD Continuum of Care Homeless
Assistance funds for rural Arizona (all counties excluding Maricopa and Pima). These include
Supportive Housing Funds, Shelter Plus Care, and Housing Trust Fund. The state anticipates
receiving $2,229,689 in Supportive Housing Program Funds. Of this, $109,453 ‐ 5% will be
retained by the state for administration and $50,977‐2.2% will be provided to project sponsors in
Housing Trust Fund for administration.
The state anticipates receiving $209,402 in Shelter Plus Care Funds. Project sponsors
administering these programs may utilize up to 8% of the total SPC grant award, derived from
total tenant rents and units leased below fair market rent, toward eligible grant (project)
administration expenses.

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The state will invest $2,500,000 in Housing Trust Funds to sustain its Eviction/Prevention
Emergency Homeless Housing Assistance Program (EPEH). This will be done through
negotiations with the current 24 contractors located statewide the 15 existing counties who
represent nonprofit, county and city governments, and PHA agencies. Eligible project sponsors
(co‐applicants and subcontractors) include city and county governments, PHAs, Tribal
governments and nonprofit agencies servicing homeless persons. ADOH will file the national
competitive application on behalf of rural Arizona and will serve as grantee for projects
approved by HUD through subcontracts to governmental and nonprofit agencies.
Eligible program components include: transitional housing; permanent housing for disabled
persons; supportive services not in conjunction with supportive housing; Safe Havens; rental
assistance through the Shelter Plus Care Program, in either tenant based, project based, sponsor
based or SRO configurations; and Section 8 SRO housing. Within these components eligible
activities may include acquisition, rehabilitation, new construction, leasing, operating costs,
supportive services and rental assistance. The term of HUD assistance may vary depending on
the program component for which funds are requested. The Continuum of Care Application
Process has the following components: 1) existing resources and gaps addressed by the HUD
application need to be identified; 2) data collection by all agencies proposing projects for
Continuum of Care assistance and ongoing local homeless Continuum of Care planning groups;
and 3) consultation with municipal, county and COG representatives regarding needs in their
respective geographic areas; and, use of various databases compiled on a regular basis by the
state of Arizona and its agencies.
SHP Match
ADOH actively obtains matching funds for operating costs, supportive services, and capital
development for all Supportive Housing activities. ADOH has actively funded capital
development activity, over and above HUD Supportive Housing program requirements, to help
local communities and nonprofit agencies meet the housing needs of homeless persons
throughout the state.
The total SHP match is $515,144. HUD requires that recipients of Homeless McKinney‐Vento Act
assistance funding pledge leverage to awarded projects. This leverage is reported and tracked
through the HUD Continuum of Care application submitted to HUD annually. The total SHP
leverage is $ 2,947,302 million.
State Housing Trust Fund (HTF) Method of Distribution
The State Housing Trust Fund (HTF) is a resource funded through the stateʹs Unclaimed Property
Fund. Estimates from the Arizona Department of Revenue indicate the fund could expect to
receive approximately $ 30 million in the next fiscal year, a reduction of 29 %. Additionally, a
portion of the $30 million expected to be received is likely to be swept by the legislature to
balance the State budget. ADOH has identified the following funding objectives:
HTF Selection Process
ADOH makes available State Housing Trust Fund (HTF) through an application process.
Applications are accepted periodically and funding decisions are generally made in 60 days.

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Only applications that meet minimum thresholds are considered. The minimum thresholds for
HTF applications include program responsiveness and readiness to proceed.
Applications that meet minimum thresholds are underwritten based on the following criteria as
relevant to the proposed activity: 1) market need/demand; 2) management/capacity; 3)
budget/financial analysis; and 4) program design. Once it is determined that an application
meets minimum underwriting standards, the application and underwriting results are forwarded
to a funding committee for final review and recommendation. The funding committee is
comprised of senior ADOH staff, including program managers, administrators, the deputy
director, and the director. The funding committee makes a recommendation to the ADOH
Director as to whether the application should be funded without conditions, funded with
conditions, or rejected. The ADOH Director makes the final funding decision. When insufficient
funds are available, either geographically or for an activity, competitive scoring criteria are used.
If competitive scoring is necessary, the following scoring criteria will be used: Very‐low income
targeting and priority populations.
Low Income Housing Tax Credit (LIHTC) Allocation Plan
The Low Income Housing Tax Credit Program provides federal income tax credits to owners of
qualifying residential rental projects. An approximate $13 million allocation of tax credits is
available. This tax credit allocation will result in approximately $129 million in investor equity for
the construction of affordable rental housing. The program was established by the Tax Reform
Act of 1986 to replace traditional tax incentives for investment in low‐income housing eliminated
by the same law. ADOH is the agency in Arizona responsible for allocating tax credits to specific
projects that comply with the Internal Revenue Code (“the IRS” or the “Code”). ADOH carries
out this responsibility through the creation and administration of the Qualified Allocation Plan
(the “QAP”).
The state has set the following specific goals for the LIHTC program: 1) an equitable allocation of
projects between the urban and rural areas of the State and among various geographic regions; 2)
substantial involvement and input from the affected community; 3) projects serving very low‐
income families; 4) projects to be built on tribal lands; 5) acquisition/rehabilitation and
rehabilitation projects; 6) projects serving priority populations with special housing needs; 7)
projects undertaken by non‐profit organizations; 8) projects located in each of the rural Councils
of Government jurisdictions.
Arizona Public Housing Authority
ADOH operates the Arizona Public Housing Authority. Information derived from operating the
state PHA provides an accurate and recent view of public housing needs and trends for which
planning efforts can be designed to address. The responsibilities entail administering a Section 8
Voucher program for Yavapai County. In PY 2005, Graham county was adminstered also by
ADOH. The Section 8 Voucher Program provides rental subsidy payments for 89 very low‐
income households. Under contract with HUD, the Arizona PHA also provides contract
administration services for 107 HUD‐subsidized rental properties accounting for 7,580 rental
units located throughout the state. Through this program participating properties are subsidized,
allowing the very low‐income tenants to pay only 30% of their incomes on rent and utilities.
Other Sources of Funds
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Arizona Housing Finance Authority
As part of the creation of the Arizona Department of Housing, the legislature also created the
Arizona Housing Finance Authority (AzHFA). Under the provisions of HB 2615, the Authority
may issue bonds for multi‐family residential projects, bonds to finance residential dwelling units
and establish mortgage credit certificate programs. These powers have been granted for the rural
areas of Arizona. The seven members of the AzHFA are appointed by the Governor and
represent geographical diversity. No more than four members will be from the same political
party. Various work groups consisting of Authority board members are convened on a regular
basis to assist with program development and evaluation.
Arizona Department of Economic Security (DES)
⇒ Domestic Violence Shelter Fund (DVSF)
DES receives a percentage of all court filing fees collected by Arizona counties. These
funds are used to provide emergency domestic violence shelter, advocacy and support
services. Approximately $1.7 million is available in SFY 2008.
⇒ Domestic Violence Prevention (DVP)
DES contracts these state appropriated funds for services such as counseling, shelter,
transportation, transitional housing and childcare. Approximately $8.2 million is
available in SFY 2008.
⇒ Emergency Shelter Grant (ESG)
The ESG program is funded under the McKinney‐Vento Homeless Assistance Act. The
primary intent of ESG is to provide funds for renovation/rehabilitation and operating
expenses for homeless shelters. Approximately $838,000 is available in SFY 2006.
⇒ Homeless Trust Fund (HTF)
The Arizona Legislature passed a bill that liquidated the Homeless Trust Fund and
provided a one‐time allocation of $400,000 to Maricopa County, $200,000 to Pima County
and approximately $240,000 to the balance of the rural counties.

⇒ Social Services Block Grant (SSBG)
SSBG, also known as Title XX, is not homeless specific. However, part of the available
funds, some of which are planned at a local level and some at a department (DES) level,
have been allocated specifically for services to domestic violence victims in addition to
general homelessness. Crisis intervention, which includes shelter and counseling, is
provided for domestic violence victims. Services funded for homeless people in general
include crisis intervention, case management, and transportation. The U.S. Department
of Health and Human Services (DHHS) administers the SSBG funds. Approximately
$685,000 is available for domestic violence services and homeless services received
approximately $769,000 in SFY 2008.
⇒ Homeless Shelter Line Item
These funds are appropriated by the Arizona State Legislature for homeless shelters as a
line item in the DES budget. The funds are then contracted out through state agencies to

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non‐profit, community‐based providers to pay for the cost of shelter facilities and
services and to provide hotel and motel vouchers. In SFY 2008, about $1.1 million is
available through this state fund source. An additional $1 million may also be available
through the lottery funds.
⇒ Temporary Assistance for Needy Families (TANF)
TANF funds are available through the Title IV‐A of the Social Security Act, which are
administered by the Department of Health and Human Services. The state has submitted
amendments to the TANF State Plan in order to establish a TANF emergency services
plan. Although the federal regulations do not specify that eligible clients be homeless,
they do allow a State TANF Plan, or a portion of the Plan, to be limited to a targeted issue
such as homelessness. Arizona has used a portion of the TANF funds for homeless
services that include shelter (at a facility or by voucher), prevention, move‐in assistance,
and case management services. Approximately $6.6 million was available to domestic
violence services while $1.6 million was available for homeless services in SFY 2008.
Arizona Department of Education (DOE)
⇒ Education for Homeless Children and Youth: Grants for State and Local Activities
In January of 2002, the McKinney Vento Homeless Assistance Act was reauthorized as a
part of “No Child Left Behind” legislation. This Act requires educational access and
equity for children and youth experiencing homelessness, outlines responsibilities for
local liaisons, and provides funding to support local grants and statewide initiatives.
The Arizona Department of Education utilizes this funding to maintain a State
Coordinator of Homeless Education, a role clearly defined by McKinney Vento. The
Coordinator is responsible for developing Arizona’s state plan, facilitating coordination
with other agencies, providing technical assistance to public school districts, and
gathering comprehensive data for federal reporting purposes. For the 2005‐6 school year,
19,122 students experiencing homelessness were enrolled in Arizona public schools.
The McKinney Vento Homeless Assistance Act also outlines specific responsibilities for
the Local Education Agencies (LEAs). Each of the 623 public school districts and charter
holders in Arizona have designated a Local Educational Agency Liaison to ensure that
students experiencing homelessness:
1) Are informed of their rights as homeless children and unaccompanied youth.
2) Are identified, immediately enrolled in, and have a full and equal opportunity to
succeed in school.
3) Are provided transportation to remain in their “school of origin” if it is in their “best
interest” and considered feasible.
4) Have records maintained and available in a timely fashion.
5) Receive all educational services for which they are eligible, including free breakfast
and lunch, Title I, gifted, special education, migrant, and English acquisition services.
While all public school districts are held accountable for these responsibilities, some
receive financial assistance to do so. McKinney Vento sub grants help defray costs
associated with educating homeless students, such as transportation services, facilitating
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initial enrollment services, social services, and delivering supplemental instructional
services. For SFY 2006, $1,215,871 was allocated on a competitive basis to those with the
highest program quality and greatest need for assistance. Additionally, school districts
must reserve a portion of their Title I funds in case they should need them for the unique
needs of homeless students. In SFY 2006, approximately $1 million of Title I funds were
set aside.
Arizona Department of Health Services (DHS)
⇒ Projects for Assistance in Transition from Homelessness (PATH)
The PATH Grant is a federal grant from the Substance Abuse and Mental Health Services
Administration – U.S. Department of Health and Human Services for the purpose of
providing outreach services to persons with serious mental illness who are homeless.
DHS/Division of Clinical and Recovery Services utilizes the PATH Formula Grant Funds
to provide an array of services to persons who are homeless and have a serious mental
illness, including those with co‐occurring substance abuse problems. Through a
competitive bid process, DHS contracts with three local mental health providers to carry
out the daily operations of PATH. DHS is responsible for program oversight, grant
administration, cash match, monitoring, and providing technical assistance to grantees.
The three providers serving the areas of the state where the largest numbers of homeless
individuals and families are concentrated are Southwest Behavioral Health Services,
Community Partnership for Southern Arizona, and Northern Arizona Behavioral Health
Authority.
In FY 2005, PATH funded programs contacted approximately 6,000 homeless persons. It
is projected that over 7,000 homeless persons will be contacted in FY 2006. It is further
projected that over 1,000 of those contacted will be identified as having a serious mental
illness. These individuals will be enrolled in a behavioral health authority.
⇒ Shelter Plus Care
The HUD funded Shelter Plus Care program, accessed through the three Continua of
Care, provides rental assistance that, when combined with locally funded supportive
service agencies, provides supportive housing for homeless people with disabilities and
their families. The DHS/Division of Clinical and Recovery Services has the responsibility
to administer services for persons who are seriously mentally ill. State appropriated
funds are allocated to private Regional Behavioral Health Authorities that subsequently
provide matching funding for services to approximately 2,000 seriously mentally ill
persons who receive housing subsidies provided by the Shelter Plus Care program. This
funding equals $17,119,886 in supportive services to maintain formally homeless clients
living in independent housing. Shelter Plus Care housing programs must be
administered by the government agencies such as ADOH, DHS, or public housing
authorities.
⇒ State General Funds
State general funds appropriated to DHS are used to develop a number of “community
housing” programs and level of care systems for persons with serious mental illnesses.
These funds provide permanent housing for individuals discharged from the Arizona
State Hospital, board and care facilities, supervisory care homes and/or residential

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treatment programs as described in the Arnold vs. Sarn lawsuit. These funds are used to
purchase, lease, or rent properties in either the house model or small apartment
complexes that offer consumers safe, decent, stable housing with the availability of in‐
home supportive services. The ability to integrate and maintain clients in the community
is a major goal and component of the mental health service delivery system. DHS
provides this supportive serivce to assist persons with serious mental illnesses in
maintaining their independent housing in accordance with the Individual Service Plan.
3. Statement Of Specific Annual Objectives/Outcome Measures
The state’s action plan must contain a summary of the priorities and the specific annual objectives. From
their 3 or 5 year consolidated plans, grantees will delineate which outcome goals and objectives the grantee
plans to address in the coming year. States are encouraged to identify specific objectives under the general
outcomes and objective categories involving the availability/accessibility, affordability and sustainability of
decent housing, a suitable living environment, and economic opportunity using option Table 3A
(Summary of Annual Specific Objectives and Projects). If this table is not used, states must provide
comparable information that is required by the consolidated plan regulation.
Each specific objective developed to address a priority need must be identified by number and contain the
proposed accomplishments and outcomes the state hopes to achieve in quantitative terms during the
specified time period, or in other measurable terms as identified and defined by the state.
Outcome Measures – The action plan must provide outcome measures for activities included in its action
plan in accordance with the Federal Register Notice, dated March 7, 2006 (i.e., general objective category
(decent housing, suitable living environment, economic opportunity) and general outcome category
(availability/accessibility, affordability, sustainability). The outcomes, outputs and indicators that the
grantee plans to work on in the coming year should be included in optional Table 3A, Summary of Annual
Objectives and Projects. If this table is not used, states must provided comparable information that is
required by the consolidated plan regulation and the Federal Register Notice.
The state has chosen to incorporate Table 3A, Summary of Annual Specific Objectives and
Projects. This table details the specific objectives under the general outcomes and objective
categories involving the availability/accessibility, affordability and sustainability of decent
housing, a suitable living environment, and economic opportunity using option, are required.
Further, the state has incorporated into this table the specific goals and projects by which all
funds will be invested. That includes goals and projects for a) rental development and
rehabilitation ; b) owner housing objectives for new development, rehabilitation, emergency
repair and downpayment and closing cost assistance; c) homeless goals; d) special needs housing
and services goals; e) community development and revitalization goals; f) economic
opportunities goals.

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Table 3 A
Fourth Annual Action Plan; Summary of Annual Specific Objectives and Projects
Obj/
Proj #
RHO1
RHO1.1

Specific Annual Objectives
Rental Housing Objectives
Increase the availability of
affordable rental housing
Project 1
Using LIHTC, Bond, and HOME
financing to produce new rental
units affordable to households
earning from 50% to 60% area
median income (AMI).

Source of
Funds

Performance
Indicators

LIHTC, Bonds,
and HOME,
private/public
partnerships

Maintain or
increase the
number of
affordable
housing units

Actual
Units

Expected Outcome/
Units Objective

450

DH1.1
DH2.1

90

DH1.2
DH2.2

The number of
LIHTC units
placed in service

RHO1.2

Project 2
Provide eligible rental
developments sufficient HOME
and HTF gap financing to
produce new rental units
affordable to non‐special needs
households earning between
40% and 50% of AMI

HOME and
HTF,
private/public
partnerships

# of years added
to affordability
period
Maintain or
increase the
number of
affordable
housing units
# of years added
to affordability
period
# of state assisted
units

Obj/
Proj #

Specific Annual Objectives
Rental Housing Objectives

RHO2

Improve the quality of rental
housing

RHO2.1

Project 1
Preserve the existing affordable
rental housing stock, especially
in conjunction with
comprehensive neighborhood
efforts, by using LIHTC, Bond,
and HOME financing to
rehabilitate rental units and
make available to households
earning from 50% to 60% area
median income (AMI).

RHO2.2

Project 2
Preserve the existing affordable
rental housing stock, especially
in conjunction with
comprehensive neighborhood
efforts, by providing eligible
rental developments sufficient
HOME and HTF gap financing
to rehabilitate XXX rental units
and make available to non‐
special needs households
earning between 40% and 50%
of AMI

RHO3

RHO3.1

Increase opportunities for low‐
income households to become
and remain renters through
rental subsidies
Through ADOH PHA, maintain
oversight and monitoring
responsibilities for subsidized
properties throughout the state

Source of
Funds

Performance
Indicators

LIHTC, Bonds,
and HOME,
private/public
partnerships

Maintain or
increase the
number of
affordable
housing units

300

# of contracts/ ‐‐
years added to
affordability
period

18

Maintain or
increase the
number of
affordable
housing units

60

# of contracts ‐‐
years added to
affordability
period

18

HOME and
HTF and
private/public
partnerships

HUD, HTF

Maintain or
increase the
number of
affordable
housing units

Actual
Units

Expected
Units

110

Outcome/
Objective

DH1.3
DH2.3

DH1.4
DH2.4

DH1.5
DH2.5

RHO4

Promote self sufficiency and
facilitate movement from rental
to homeownership

RH04.1

Encourage programs that
promote self sufficiency
/encourage/facilitate lower
income tenants toward
homeownership

CDBG, HOME,
SHF,
private/public
partnerships

Maintain or
increase the
number
education
services such as
homebuyer
services

Specifically track
data for
programs,
directly linked
to state assisted
rental
developments

2

DH 3.1

Obj/
Proj #

OHO1.1

Owner Housing Objectives

Source of
Performance
Actual Expected
Funds
Indicators
Units
Units
OHO1
Increase the availability of affordable owner‐occupied housing
Maintain or
14
Project 1
SHF, HTF,
increase the
HOME, FHLB,
Increase the availability of
number of units
RD, local
affordable owner‐occupied
available and
private/public
housing by providing eligible
affordable
partnerships
“for sale” home
developments sufficient gap
CDBG
financing to produce homes
infrastructure if
affordable to households
part of SRA and
earning from 51% to 80%
with CBDO
AMI.
Project 2
Increase the availability of
affordable owner‐occupied
housing by providing eligible
“for sale” home
developments sufficient gap
financing to produce homes
affordable to households
earning from 30% to 50%
AMI.

SHF, HTF,
HOME, FHLB,
RD, local
private/public
partnerships
CDBG
infrastructure if
part of SRA and
with CBDO

Maintain or
increase the
number of units
available and
affordable

3

Outcome/
Objective

DH1.6
DH2.6

DH1.7
DH2.7

OHO2
Improve the quality of owner‐occupied housing
OHO2.1

Project 1
Improve the quality of owner‐
occupied housing by preserving
the housing stock currently
owned by low‐income households
while reducing substandard
housing overall, by providing
sufficient funding to local
governments and non‐profit
organizations to rehabilitate
homes for households earning
from 51% to 80% AMI.

OHO2.2

Project 2
Improve the quality of owner‐
occupied housing by preserving
the housing stock currently
owned by low‐income households
while reducing substandard
housing overall, by providing
sufficient funding to local
governments and non‐profit
organizations to rehabilitate
homes for households earning
between 31% and 50% AMI

SHF, HTF,
HOME, FHLB,
RD, local
private/public
partnerships

Maintain or increase
the units brought from
substandard to
standard condition

25

DH3.2

Maintain or increase
the units brought from
substandard to
standard condition

24

DH3.3

CDBG
infrastructure if
part of SRA and
with CBDO

SHF, HTF,
HOME, FHLB,
RD, local
private/public
partnerships
CDBG
infrastructure if
part of SRA and
with CBDO

OHO3.1

Project 1
Improve the quality of owner‐
occupied housing by providing
sufficient funding to local
governments and non‐profit
organizations to conduct
emergency repairs on homes for
households earning from 51% to
80% AMI.

OHO3.2

Project 2
Improve the quality of owner‐
occupied housing by providing
sufficient funding to local
governments and non‐profit
organizations to conduct
emergency repairs on homes for
households earning between 31%
and 50% AMI.

OHO3.3

SHF, local public
and private
partnerships

Maintain or increase
the units brought from
substandard to HQS
condition

61

DH3.4

SHF, local public
and private
partnerships

Maintain or increase
the units brought from
substandard to HQS
condition

94

DH3.5

Project 3

144

DH 1.8
DH 2.8

Increase the opportunities for low
and moderate‐income household
to become and remain
homeowners through
homeownership assistance by
providing down payment and
closing cost loans to households
earning up from 61% to 80% AMI.
OHO3.4

Project 4
Increase the opportunities for low
and moderate‐income household
to become and remain
homeowners through
homeownership assistance by
providing down payment and
closing cost loans to households
earning up at or below 60% AMI.

OHO3.5

Project 5
Increase the opportunity to
receive foreclosure counseling

Homes for
Arizonans‐ SHF,
AzHFA,
MCC/MRB

Maintain or increase
the number of
households receiving
down‐payment/closing
cost assistance

72

DH 1.9
DH 2.9

SHF/National
Grant

Increase the number of
foreclosure counseling
provider statewide

12

DH 1.9
DH 2.9

Homeless
Objectives

Source of
Funds

Performance
Indicators

Actual
Units

Expected
Units

Outcome/
Objective

HOM1
Creating stable housing opportunities for individuals and families with a history of long‐term homelessness
Maintain the
SHF, private and public
HOM1.1
Project 1
3800
DH1.10
number of
sources of funding,
DH2.10
affordable units
technical assistance
Help low‐income
provided by Special Needs
people and
(collected as
Division of ADOH; ADOH
households avoid
household
leadership in Rural
becoming
=equivalent to
Continuum of Care, DES
homeless/
unit)
leadership in areas of
Eviction
homelessness prevention
Prevention
Assistance
HOM1.2

Project 2
Provide supportive
housing for
homeless people
with disabilities
and their
families/rental
assistance

HOM
1.3

Project 3
Provide funds for
renovation/
Rehabilitation and
operating expenses
for homeless
shelters

Shelter Plus Care, state
appropriated funds,
private and public sources
of funding, technical
assistance provided by
Special Needs Division of
ADOH; ADOH leadership
in Rural Continuum of
Care, DES leadership in
areas of homelessness
prevention
ESG, local public private
partnerships
(funded under McKinney‐
Vento Homeless
Assistance)

Improved
access/availability
to services

2000
people

DH1.10
DH2.10

Improved access to
services

NOFA

DH1.11
DH2.11

Homeless
Objectives

Source of
Funds

Performance Indicators

Actual
Units

Expected
Units

Outcome/
Objective

HOM2
End chronic homelessness in ten years
HOM2.1

Project 1
Provide outreach
services for persons who
are homeless and
seriously mentally ill

HOM2.2

Provide permanent
housing solutions rather
than crisis management
to homeless persons,
homeless persons with
disabilities and their
families, persons with
serious mental illness
Promote the use of best
practice models in the
measuring the
effectiveness of
emergency and
transitional housing
programs funded
through ESG and other
funding sources

HOM2.3

PATH grant‐
competitive, DES
Southwest
Behavioral Health,
Community
Partnership for
Southern Arizona
and Northern
Arizona
Behavioral Health
Authority
State General
Fund, ESG,

ESG, other
funding sources

Improved
access/availability
to services

7000 people

DH1.12
DH2.12

Improved
access/availability
to services

3000
people

DH1.13
DH2.13

Improved access/
Availability to
services

Annual
report

SL1.1
SL3.1

Obj/
Proj #

SNO1.1

SNO1.2

Special Needs
Objectives

Source

Performance
Measure

Actual
Units

Expected
Units

SNO1
Increase the range of housing options and related services for special needs populations
Project 1
HOME,
Improved access to
40
Provide
private/public
services
accessibility
partnerships
improvements to
owner‐occupied
households.
LIHTC, Bonds,
450
Project 2
and HOME,
private/public
Providing
partnerships
assistance through
rehabilitation or
new construction
of units of
housing for low‐
income seniors
(over 62 years of
age).

Outcomes/
Objectives

DH1.14
DH2.14

DH1.15
DH2.15

Obj/
Proj #

SN1.3

Special Needs
Objectives

Source

Performance
Measure

Actual
Units

Expected
Units

SNO1
Increase the range of housing options and related services for special needs populations
Construct units of
LIHTC,
50
permanent
Bonds, and
housing for
HOME,
special needs
private/public
populations.
partnerships

Outcomes/
Objectives

DH1.16
DH2.16

SNO1.4

Construct units of
transitional
housing for
special needs
populations.

SHF, Bonds,
and HOME,
private/public
partnerships

25

DH1.17
DH2.17

SN01.5

Provide financial
support for the
construction of
emergency shelter
beds

SHF, Bonds,
and HOME,
private/public
partnerships

70 beds

DH1.18
DH2.18

Obj/
Proj #

HOP1.1

Special Needs
Objectives

Source

Performance
Measure

Actual
Units

Expected
Units

HOPWA1
Increase the range of housing options and related services for persons with AIDS
HOPWA
Improved access to
300 people
Provide short‐
services
term mortgage
rent, utility
assistance and
supportive
services
Contracts
through Mohave
County Public
Health
Department and
Northland Cares

Outcomes/
Objectives

SL1.2
DH1.18

Obj./
Proj. #

Community Development
Objectives

Source

Performance
Measure

Actual Expected Outcomes/
Units
Units
Objectives

CDO1
Create, enhance, or sustain the operation of neighborhood facilities and improvements
CDBG, local
CDO1
Project 1
Improved
8
public and
access to
Create, enhance,
private
service
Create, enhance, or sustain the
or sustain the
resources
operation of infrastructure
operation of
systems
affecting the health
neighborhood
and
safety
of community
facilities and
residents/rehabilitation and
improvements
expansion of water and sewer
lines, street and sidewalk and
flood drain improvements.
CDO1
Create, enhance,
or sustain the
operation of
neighborhood
facilities and
improvements

CDO2.1

Obj/
Proj #
EOO1

Project 1

Improve or enhance
accessibility to public facilities
that benefit LMI people

CDBG, local
public and
private
resources

Improved
access to
service

CDO2
Create, enhance, or improve the delivery of human and recreational services
CDBG, local
Improved
Project 1
public/
access to
Rehabilitation and improve
Private
service
accessibility to public services
partnership
facilities/improve or expand
park facilities including green
space, neighborhood parks
and recreational facilities.
Economic Opportunity
Objectives
Expand technical assistance
via partnerships with other
agencies such as Arizona
Department of Commerce,
state universities and
education institutions,
Arizona Community
Foundation and others

Source
Technical
assistance –
number of
meetings

Performance
Measure
Improved
access to
service

SL1.3
SL3.2

7

SL1.4
SL3.3

11

SL1.5
SL3.4

Actual Expected Outcome/
Units
Units
Objectives
6
EO1.1

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4. Low Income and Minority Concentration Areas
As a function of its planning processes, the Arizona Department of Housing routinely considers
economic and statistical data in its analysis. ADOH invests statewide, through its State Housing
Trust Fund, and its low‐income housing tax credit allocations. ADOH, however, directs the
investment of its formula programs in the non‐entitled areas of the state‐those communities that
do not receive a direct allocation from HUD. State priorities for formula program allocations are
determined through analysis of census data, American Community survey data, and from other
state and national resources.
Arizona is one of the four states with communities that meet the definition of colonias. HUD and
the United States Department of Agriculture (USDA) define colonias as non‐metropolitan,
unincorporated neighborhoods and incorporated communities within 150 miles of the US‐Mexico
border in California, Arizona, New Mexico, and Texas that lack sewer, water or decent housing –
or a combination of all three. Most of cities and towns in Arizona that are designated as colonias,
as shown in Table 1, Rural Minority Concentration Census Tracts, have the capacity to manage
the needs of their communities, and thus participate as units of general local government through
the method of distribution prescribed in the FY 2005 Consolidated Plan. Similarly, those areas
not designated as colonias, but supporting low income and minority concentration areas, i.e.,
Eloy, Winkelman and Douglas, have the capacity to manage the needs of their communities, and
regularly access formula allocations though the application and award process.

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Census
Tract
Number
6.00
7.00
8.00
9.00
13.00
19.00
20.00

Table No. 1
RURAL MINORITY CONCENTRATION CENSUS TRACTS
% Below
Percent of
Poverty
County
City/Town
Minorities
Level
Cochise
Douglas
75.0
36.2
Cochise
Douglas
85.2
33.8
Cochise
Douglas
85.3
35.7
Cochise
Douglas
92.6
40.6
Gila
Winkelman
75.7
25.6
Pinal
Eloy
83.4
37.1
Pinal
Eloy
81.4
27.6

9961.02
9962.00
9963.00
9964.01
9964.02

Santa Cruz
Santa Cruz
Santa Cruz
Santa Cruz
Santa Cruz

Unincorp. County
Nogales
Nogales
Nogales
Nogales

81.7
93.3
94.5
95.7
94.5

14.0
35.0
31.0
32.3
38.5

97.5
68.0
62.1
80.0
60.1

2.00
3.01
3.02
4.02
7.00
114.01
115.01
115.02
116.00

Yuma
Yuma
Yuma
Yuma
Yuma
Yuma
Yuma
Yuma
Yuma

Yuma
Yuma
Yuma
Yuma
Yuma
San Luis
Somerton
Somerton
San Luis

76.9
78.3
85.2
85.8
78.1
99.0
83.1
96.0
98.9

17.8
24.5
45.8
29.1
27.4
34.0
40.0
26.4
38.1

96.5
89.7
63.9
86.4
71.3
68.0
70.0
81.0
38.1

Median
Family
Income %
62.8
76.0
71.0
59.3
84.1
57.2
60.2

State Minority Percent
36.2%
Source: Census 2000, the Federal Financial Institutions Examination Council (FFIEC), Arizona
State Data Center, and Arizona Department of Housing.
Arizona

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In addition to areas of minority concentration, and areas designated as colonias, the Arizona
Department of Housing seeks to provide housing and community development and
revitalization services on tribal lands. Table 2, Percent of Total Population Who Are American
Indian and Alaska Native Alone, by County, is a map comprised of data collected in the 2005
American Community Survey.
T
Table 2
Percent of the Total Population Who Are American Indian and Alaska Native Alone: 2005
Universe: Total population
Data Set: 2005 American Community Survey
Survey: 2005 American Community Survey
Arizona by County
NOTE. Data are limited to the household population and exclude the population living in
institutions, college dormitories, and other group quarters. For information on confidentiality
protection, sampling error, non‐sampling error, and definitions, see Survey Methodology.

Source: U.S. Census Bureau, 2005 American Community Survey

More demographic information about Arizona’s communities has been collected and is provided
in Appendix C.

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5. Narrative of Homeless Goals
In December 2005, the Governor’s Interagency and Community Council on Homelessness (ICCH)
approved the State Plan to End Homelessness. The focus of the ICCH, and the State Plan, is to
create a system that is focused on: A) Prevention – eliminating the need for individuals and
families to ever enter the homeless service system; B) Service Integration – a flexible, “wrap
around” approach to service delivery; C) Permanent Housing – providing permanent solutions,
instead of constant crisis management; and D) Outcomes‐oriented – focus on outcomes, instead
of outputs.
Each of the action steps below for “Chronic Homelessness,” “Homelessness Prevention” and
“Discharge Coordination Policy” were the action steps identified for completion in Program Year
Two directly from the State Plan to End Homelessness by the ICCH. Although divided by
category, each action step falls under the goals of the State Plan, except that the fourth goal, to be
“outcomes‐oriented,” applies to all three categories below. The action steps to be completed this
year under that goal are:
Goal: Outcomes‐Oriented
1.

Establish and review performance measures: Arizona Evaluation Project will
publish preliminary findings on:
• Measurement model for Homeless Emergency/Transitional programs
• Preliminary report on Homeless based upon measurement model –
• Treatment/predictive model for Emergency/Transitions Homeless
• First formal evaluation of Homeless Emergency/Transitional programs using
treatment/predictive model

2.

Support valid and reliable research specific to Arizona: Three research studies
– cost/benefit study on chronically homeless families (statewide), cost/benefit
study on chronically homeless individuals going into permanent housing
(Maricopa County) and a study of chronically homeless individuals (Pima
County) – will be completed and disseminated.

3.

Encourage the use of best practice models: The Department of Economic
Security requires that best practice models be incorporated into emergency and
transitional housing programs that are funded through ESG and other funding
sources.

4.

Enhance data collection and integration: The Statewide HMIS Reporting System
(SHRS) has combined aggregate HMIS data from each of the three state
Continuum of Care organizations into a single database and has released its first
quarterly reports. The SHRS Advisory group will review and enhance the data
integration system in the Third Program Year.

For this Fourth Program Year, creating stable housing opportunities for individuals and families
with a history of long‐term homelessness has been identified as a priority need. Therefore, an
emphasis has been placed on increasing supportive housing through greater affordable housing
stock and the availability of supportive services.

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Two main obstacles to completing these action steps are operating and services funding for
supportive housing projects. To this end, several of the agencies that participate on the ICCH are
discussing requesting additional state funds to work toward this goal through a joint budget
request next legislative session. Another group working on a similar issue, the Governor’s
Incentives to Affordable Housing Task Force, will be making recommendations in a number of
areas that might be helpful to serve this population as well. Also, there will be action planning
with local communities to identify local resources that may be able to fund supportive housing
units in their areas.
6 Narrative of End Chronic Homelessness
1. Improve access to mainstream support programs:
• Arizona launched a joint venture with the Stepping Stones to Recovery, SSI/SSDI
Outreach, Access, and Recovery (SOAR) Project to help individuals who are
chronically homeless and disabled with no income by assisting them in obtaining
benefits through the Social Security Administration. A two‐day strategic
planning session was held in January 2006. Arizona SOAR training was initiated
as a joint venture between the Arizona Departments of Health Services,
Economic Security, and Social Security Administration, Continua of Care, and
providers of services to chronically homeless individuals. In
Program Year Two, SOAR trainings were implemented in Phoenix, and Tucson.
Outcomes of the training will be tracked to assess whether the training results in
increased access to SSI/SSDI benefits.
•

The Department of Health Services (DHS) has committed an Assertive
Community Treatment team to the Maricopa Human Services Campus Day
Resource Center. DHS is in the process of working with Value Options (the
Regional Behavioral Health Authority) to construct the team, which will work in
coordination with the Day Resource Center (local provider) to engage chronically
homeless individuals.

2. Increase supportive housing development for individuals and families:
• An action plan with five targeted local communities will be developed for
expanding the availability of new units of supportive housing for long‐term
homeless families (343 units total) and individuals (1348 units total) across the
state and will establish individual area annual targets.
o 34 units of supportive housing will be developed for long‐term homeless
families
o

135 units of supportive housing will be developed for long‐term homeless
individuals.

3. Expand the housing resources available for supportive housing:
• An interagency budget planning group has been formed and will be exploring
options for a joint budget package for SFY 2008.
4. Increase public awareness of the need for supportive housing:
• The ICCH workgroup will explore strategies for improving public
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awareness and support for supportive housing across the state. A public
awareness subcommittee was established.
5. Research and analyze key barriers to accessing supportive and affordable housing:
• An Interagency Planning Group on Supportive Housing will be formed
and will meet to discuss eliminating barriers to supportive housing
development. The “Governor’s Incentives for Affordable Housing Taskforce”
will also provide recommendations for increasing affordable housing
development.
6. Encourage the role of federal government in affordable and supportive housing:
• The ICCH workgroup will explore strategies for increasing funding for
supportive housing at the federal level.
The obstacles to accomplish these action steps are similar to those noted above. While
the state plays an important role in encouraging the development of supportive housing,
local communities, developers and other funding sources must be actively engaged in the
process in order for these steps to be accomplished.
Homelessness Prevention
1. Increase the use of risk assessment tools: An initial risk assessment tool was
developed and piloted. The Department of Economic Security (DES) will continue to
improve the tool until it is deemed reliable and valid. The state will eventually be
able to use this tool to most efficiently direct resources.
2. Create and expand technology tools to provide more timely and accessible
information: Three websites have been developed and will continue to be improved
that provide information on eligibility for state and federal programs
(www.azselfhelp.com), affordable housing (www.socialserve.com), and general social
service information (www.az211.gov).
3. Focus on outcomes, not outputs, of prevention activities:
• Require follow‐up with families 6 and 12 months post‐assistance in the
ADOH Request for Proposals with Eviction Prevention/Emergency Housing
funding.
•

Work with Community Action Agencies on developing and implementing
their ROMA (Results‐Oriented Management and Assessment) standards.

4. Implement multidisciplinary teams:
• The Department of Economic Security has implemented
multidisciplinary Family Connections teams comprised of child welfare,
TANF, and employment specialists in four shelters with the goal of rapidly
re‐housing families. Family Connections engages families involved in TANF
and at‐risk for involvement in the child welfare system in comprehensive,
integrated services with the overarching goal of assisting families in
achieving self‐sufficiency, safety and overall well‐being. The mission of

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Family Connections is to promote and empower safe, healthy families by
assisting them in achieving their highest potential. Services are family
focused, strength based, voluntary, and coordinated.
•

TANF Service Coordinators will be placed in shelters throughout the state
in order to expedite the benefits process for families.

•

DES/Family Assistance Administration and the Department of Education
will partner to provide training regarding benefits programs to homeless
education liaisons.

5. Improve access to adequate physical heath care, including dental care: Maricopa
Health Care for the Homeless constructed a new state of the art clinic, which
celebrated its ribbon cutting on the Human Services Campus in November 2005.
Adele O’Sullivan, M.D., Medical Director for the Clinic was named 2006 Family
Physician of the Year by the American Academy of Family Physicians. In addition,
the Campus includes a state of the art dental clinic. The clinic serves chronically
homeless individuals and boasts eight dental stations that include the latest in
technology and treatment methodologies.
7. Discharge Continuation Policy
1.

Discharge Planning from Hospitals: A committee has been formed and is chaired
by the Administrator of the Maricopa Health Care for the
Homeless Clinic. This group will begin working with hospitals and care providers in
the Maricopa County region (with expertise from other areas of the state) to develop
a comprehensive hospital discharge plan and recommendations for systems changes.

2. Discharge Planning from Prisons:
• Support the implementation of the Department of Corrections Homeless
Prevention Plan.
• Support the work of the Re‐Entry Task Force subcommittee to begin a pilot
housing project for people exiting prisons who have significant barriers to
housing.
3. Transitions Plans: Change Medicaid status from termination to suspension when an
individual is being returned to an institution (i.e. jails, prison, state hospital and other
managed care environments).

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Monitoring
Every effort will be made to ensure all projects and units remain compliant with the regulations
set forth by the applicable funding source and for the period of time specified in the funding
contract.
Community Development Block Grant (CDBG)
Staff conducts desk monitoring during all phases of each project based on a combination of a risk
analysis and random sample. Documented desk monitoring includes a detailed application
review including national objectives, eligible activities, cost reasonableness, anti‐speculation,
citizen and public participation and certifications; requests for payment; environmental review;
procurement and contracting; acquisition; construction bids/contracts; labor standards including
weekly payrolls and employee interviews; Section 3; housing rehabilitation guidelines;
homeownership assistance guidelines; and, sub‐recipient agreements, closeout reports, and
audits. The nature of the activities undertaken by grantees determines which documents must be
submitted for desk monitoring. After desk monitoring has been completed, the grantee is
notified, in writing, as to whether the items reviewed were compliant or what corrective actions
are needed with a date for such to be completed.
Staff also conducts on‐site monitoring visits. Each community is monitored at least twice during
the contract period; once during construction and again at close‐out. During on‐site monitoring
the project site(s) is/are visited to ensure consistency with the information in the application and
contract. Additionally, a sample of files is reviewed. Checklists are provided to all grantees to
ensure communities maintain all required documents and the on‐site monitoring proceeds
efficiently. Grantees are always notified in writing in advance of a monitoring visit; it is
scheduled at a mutually convenient time. All monitoring visits result in a report that identifies
the items reviewed, any concerns and findings, and a response date if necessary.
Response dates for both desk and on‐site monitoring are tracked through Housing Development
Software (HDS). Lack of timely, appropriate responses can result in a withholding of funds, an
inability to apply for future funds or a grant termination following appropriate notification and
due process procedures. Responses are reviewed for completeness and, if necessary, an
additional correspondence is exchanged until all issues are resolved.
HOME Investment Partnership Program

The goals and philosophy behind ADOH’s monitoring is 1) to document accountability for the
proper use of funds to regulatory oversight agencies and to the public; 2) to provide recipients
with the training and technical assistance necessary to comply with legal requirements for the use
of these public funds; and, 3) in cases of outright non‐compliance, to take all necessary measures
to assure issues are adequately resolved and/or proper sanctions are undertaken.

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Monitoring Policy for Funding Contracts
Desk reviews and on‐site monitoring provide an on‐going assessment to assure the activities and
transactions undertaken by the recipient of HOME funds are allowable within laws, regulations,
and policies that govern the program. Staff is responsible for gauging information received (or
not received) from recipients against all applicable laws, regulations, and policies. Throughout
the contract period, recipients must submit bi‐monthly reports. The reports update staff
regarding the recipient’s progress and collects federally‐mandated reporting information such as
matching contributions, contracts let to minority and women owned businesses, and statistics on
any relocations. Occasionally additional documentation is required of recipients that will enable
staff to provide in‐house oversight (“desk monitoring”).
As part of on‐going technical assistance to recipients, staff is available to meet with recipients as
necessary. Recipients who have not previously contracted with the ADOH for funding or who
are engaging in a new activity may be required to attend a pre‐contract meeting. Staff also makes
themselves available for additional meetings and technical assistance visits as necessary
throughout the open contract period.
In addition to reviewing monthly reports, staff schedules at least one‐site visit for each recipient
of HOME dollars on an annual basis. Since most HOME contracts are typically open from a
period of 12 months to two years, most contracts will receive at least two monitoring visits – one
of which is scheduled when the project or program is near completion. Each monitoring visit
generally involves at one‐to‐two day visit to the recipient agency to review records, inspect the
program/project’s progress in completing required activities, and to meet with staff responsible
for the HOME funded program/project.
On‐site monitoring visits shall include the following components: entrance/exit conferences,
documentation/file review, and viewing of the project (as applicable). Within 30 days of an on‐
site monitoring visit, staff will provide written monitoring comments to the recipient in the form
of a follow‐up letter. The letter shall, at a minimum, include date of review and those present
during the review, results of the monitoring (satisfactory performance, concern, or finding), a
statement describing the basis for each conclusion, instructions on what the recipient must do to
address any area of concern or finding, and a deadline by which the recipient must respond. In
extreme cases of non‐compliance, staff shall determine that an additional on‐site monitoring visit
is necessary before an issue can be adequately resolved.
Staff will work with recipients to the greatest extent possible to come to a satisfactory resolution
in areas where recipients are in non‐compliance or when on‐site monitoring visits have resulted
in findings. Deadlines are set and recipients are expected to bring their program/project into
compliance. ADOH exhaust all possible avenues to bring a recipient’s contract into compliance,
but the matter may be determined by the Department to be an “unresolved issue” or “out of
compliance.” Any recipient with an “unresolved” or “out of compliance” issue may be barred
from further funding from the State Housing Fund program (HOME and/or Housing Trust
Funds). A recipient who has been barred from future funding due to “unresolved” or “out of
compliance” issues may appeal the decision in one of two ways: 1) by resolving the issue to the
ADOH’s satisfaction, or 2) providing a detailed plan of action in the area(s) of concern that
describes the procedures to recipient put into place to alleviate any future possibility of non‐

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compliance. ADOH, in its sole discretion, may reject such plans of action if it is deemed
insufficient in alleviating the Department’s concerns about future performance and compliance.
Long‐Term Monitoring for State‐Assisted Rental Housing
As outlined in all funding contracts and Declaration of Covenants, Conditions, and Restrictions
(CC&Rs), rental property owners/managers are required to maintain complete files to comply
with program reporting requirements and to make their records available to authorized agents of
the state and federal government. ADOH holds owners of state assisted housing responsible for
compliance with applicable state and federal regulations throughout the compliance period.
Desk review and on‐site monitoring provide an on‐going assessment to assure the rental units
assisted with State Housing Fund (HOME and/or Housing Trust Funds) dollars are being utilized
in accordance with all laws, regulations, and policies that govern the program. Staff is
responsible for reviewing information received (or not received) from property owners/managers
as it relates to laws, regulations, and policies.
Throughout the compliance period, property owners/managers must complete and submit a
”Yearly Compliance Report.” The report updates staff on the status of the state‐assisted units
and property. Outright failure to comply with the reporting requirements of the program will
result in an unresolved compliance issue and will prohibit owners from receiving future State
Housing Fund dollars until the property is brought into compliance.
In addition to reviewing the yearly report, staff will schedule on‐site monitoring visits according
to the requirements of the HOME Program, as described below. The frequency of on‐site
monitoring is determined by the total number of units – both assisted and non‐assisted ‐ within
the property, according to the following schedule:
Number of Units in the Project
1‐4
5‐25
26+

Minimum Frequency of Site Visits
Once every 3 years
Once every 2 years
Once every year

The length of the compliance period is determined by the amount of State Housing Funds
invested per unit in the project. The compliance period, also known as the affordability period, is
determined in the initial underwriting and is communicated to funding recipients at the time of
initial commitment. The length of the compliance period is also outlined in the legal
documentation filed on the property.
Activity

State Investment Per Unit

Minimum Affordability
Period

Acquisition /
Rehabilitation

Less than $15,000
Between $15,000 ‐ $40,000
More than $40,000

5 Years
10 Years
15 Years

Regardless of Amount

20 Years

New Construction or
Acquisition of Newly
Constructed Units

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On‐site monitoring visits shall include the following components: entrance/exit conferences,
tenant/general file review, and inspection of the state‐assisted units and common areas. Within
30 days of an on‐site monitoring visit, staff shall provide written monitoring comments to the
recipient in the form of a follow‐up letter. The letter shall, at a minimum, include date of review
and those present during the review, results of the monitoring – satisfactory performance,
concern, or finding, a statement describing the basis for each conclusion, instructions on what the
recipient must do to address any areas of concern or finding, and a deadline by which the
recipient must respond. In extreme cases of non‐compliance, staff shall determine that an
additional on‐site monitoring visit is necessary before an issue can be adequately resolved.
The focus of the on‐site monitoring is to determine compliance with tenant income eligibility
requirements, maximum allowable rental rates, physical property standards, and affirmative fair
marketing laws.
Staff will work with property owners/managers to the greatest extent possible to come to a
satisfactory resolution in areas where properties are in non‐compliance or when on‐site
monitoring visits have resulted in findings. Deadlines are set and adhered to by which property
owners/managers are expected to bring their property into compliance. Should ADOH exhaust
all possible avenues to bring a property into compliance, the matter may be determined by the
Department to be an “unresolved issue.” Any property owner/manager with unresolved issues
may be prohibited from further funding from the State Housing Fund. A property
owner/manager who has been prohibited from receiving future funding due to unresolved issues
may not appeal the decision but may have the ban lifted by bringing the property into
compliance.
Low Income Housing Tax Credit (LIHTC)
ADOH is required to monitor and inspect Low Income Housing Tax Credit (LIHTC) projects for
compliance with the Internal Revenue Code (IRC) Section 42, Treasury Regulation 1.42‐5, the
requirements (set‐asides, income restrictions, rent skewing, affordability period, amenities and
services, etc.) elected in the application and agreed upon in the Extended Use Agreement, and
upon which the Department based its award of tax credits.
ADOH has prepared a Low‐Income Housing Tax Credit Program Compliance Manual for all
program participants. The manual outlines the Department’s compliance monitoring procedures
and reporting requirements. The manual also includes samples of all annual reports,
certifications, etc. Twice annual training is offered by the ADOH on the Compliance Manual and
owner’s/manager’s compliance responsibilities. Topics covered include recordkeeping, record
retention, certifications, reviews and inspections, liability, and correction of non‐compliance
conditions.
ADOH is required to file Internal Revenue Service (IRS) Form 8823, “Low‐Income Housing
Credit Agencies Report of Noncompliance,” with the IRS within 45 calendar days of the end of
the allowable correction period. All non‐compliance issues must be reported whether corrected
or not. The Department will explain the nature of the noncompliance or failure to certify and
state whether or not the noncompliance has been corrected. The IRS, not ADOH, will make any
determinations as to the applicability of recapture penalties.

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ADOH must perform inspections of the project and perform on‐site audits of the resident
certification forms and supporting documentation throughout the first 15 years of the compliance
period and any agreed‐upon extended compliance period. ADOH will notify the owner in
writing of the scheduling of any such inspection or audit.
Every applicant for a project that receives an allocation of tax credits must pay to ADOH a non‐
refundable monitoring fee to cover compliance monitoring of the project by or on behalf of
ADOH. ADOH will assess the monitoring fee annually and the monitoring fee will be due on or
before March 15th of each year along with the submission of the annual report.
Emergency Shelter Grant (ESG) Monitoring Plan
The Department of Economic Security (DES) will review contracts and validate for
environmental clearance prior to providing approval and expenditure and reimbursement of ESG
funds. For new ESG agencies contracting with Community Services Administration, an on‐site
visit will be conducted after the contract is awarded. ESG resources and program reports and
monitored monthly. Monthly program reports attached to fiscal claims for reimbursement are
designed to capture client data, average number of bed nights, activities, fiscal expenditures
billed and types, and sources of match. A formal desk review will be completed annually and a
written report prepared with findings and recommendations identified for corrective actions, if
necessary. At least every three years each ESG provider will receive a monitoring site visit and a
written report prepared with findings and recommendations for corrective actions, if necessary.
Completion of corrective actions with specific timelines for completion are required and verified
by DES.
Housing Opportunities for Persons with AIDS (HOPWA)
With respect to the housing and related service needs of persons living with HIV or AIDS, the
Department administers the Housing Opportunities for Persons with AIDS (HOPWA) Program.
Activities are focused on homeless prevention (through rental assistance) and providing services
to homeless persons with HIV or AIDS.
ADOH contracts and monitors for compliance with annual performance relative to HOPWA
requirements. On‐site visits are conducted following contract award and program reports are
required on an annual basis. Program reports are designed to capture client data, activities, and
fiscal expenditures billed. At least twice a year each HOPWA grantee receives a monitoring visit
and a written report with finding and corrective actions, if necessary. This visit also provides an
opportunity for on‐site programmatic technical assistance. Completion of corrective actions with
specific timelines for completion are required and verified by the Department.
Lead‐based Paint
Lead poisoning is one of the most common and preventable pediatric health problems today. In
1991, the Centers for Disease Control (CDC) issued guidelines for identifying children with lead
poisoning. Research has shown that even a low level of lead in a child’s blood could have
harmful effects on their physical and developmental health. Furthermore, the CDC has
recommended all children be screened for lead in their blood. Those identified with blood lead

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poisoning would receive intervention to remove the source of the poisoning and reduce the blood
lead level.
Lead‐based paint hazards consist of any condition that causes exposure to lead from lead‐
contaminated dust, lead‐contaminated soil, lead‐contaminated paint that is deteriorated or
present in accessible surfaces, friction surfaces, or impact surfaces that would result in adverse
human health effects as established by the appropriate federal agency. Of the 870,000 dwelling
units constructed before 1978 at risk of lead based paint hazards, 77 percent of the units were
located in metropolitan areas while 23 percent were located in rural Arizona. Of the dwelling
units constructed before 1978 and occupied by low‐income households at risk of lead‐based paint
hazards, 78 percent of the units were located in metropolitan areas while 22 percent were located
in rural Arizona. The methodology used to generate these figures incorporates the application of
national lead based paint incidence standards to the construction year residential dwellings were
built. Discussions with the Arizona Department of Health Services indicate these estimates are
reasonable for the state.
According to the information provided by the Arizona Department of Health Services, there were
331 reported cases (261 for children and 70 for adults) of elevated lead blood levels (poisoning) in
2003. The same source also indicated that a child is considered lead poisoned at 10 ug/dl and
adults are considered lead poisoned at 25 ug/dl. Eighty‐five percent of the 261 children had lead
levels of 10 to 19 ug/dl and the remaining 15 percent 20+ ug/dl.
Of the total number of children reported, 74 percent were Hispanic, 13 percent Caucasian, three
percent Native American, one percent African American, one percent Asian, and eight percent
unknown. In terms of gender, 45 percent of the reported cases for children were male and 55
percent female.
Evaluation and Reduction
Current regulations require recipients ensure occupants, homeowners and homebuyers are
notified of the hazards of lead‐based paint. Additionally, recipients must a) conduct a visual
assessment, paint testing, or risk assessment, depending on the activity, and b) conduct lead
hazard reduction activities, including paint stabilization, interim controls, standard treatments, or
abatement depending on the requirements for the activity type as identified in 24 CFR Part 35.
Some projects are funded exclusively with Housing Trust Funds and therefore are not required to
comply with the Federal LBP regulation at 24 CFR Part 35. Nevertheless, it is the Department’s
policy to provide lead‐safe housing to all assisted households. If the Department provides
assistance for the acquisition or rehabilitation of housing, and no federal funds are included in
the project financing, the following will apply as a matter of policy beginning with projects
acquired and/or rehabilitated after January 1, 2002:
1.

All units in the project will be subject to visual assessment standards for identification of
deteriorated or deteriorating paint surfaces.

2.

All rehabilitation, maintenance or other physical work on the painted surfaces will be
done using Safe Work Practices, to be certified by the owner of the property or recipient
of grant funds, unless the surface has been tested and determined to be LBP‐free.

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3.

Any such work will be subject to visual assessment standards upon completion to ensure
that the work has been completed, an intact painted surface restored, and all debris and
dust have been removed.

Rental property owners are required to have a paint maintenance policy that ensures regular (at
least annual) visual assessment and repair/maintenance of painted surfaces using Safe Work
Practices.

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Appendix A:

Report of Past Performance

Annual Community Performance Assessment (ACA)
Program Year 2006 (July 1, 2006 to June 30, 2007)

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Appendix B:

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Appendix C

Collection of Demographic Facts of Arizona’s Communities

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Appendix D: Affidavit of Public Notification

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Appendix E: Affirmatively Marketing, Fair Housing and Minority Outreach
(HOME Investments)

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Arizona Department of Housing
PUBLIC NOTICE

Fourth Year Annual Action Plan for Federal Fiscal Year 2008
The public is hereby notified that the Arizona Department of Housing (ADOH) is requesting
input on the draft of its FY 2008‐2009 Fourth Year Annual Action Plan (the “Draft”). The Draft
applies to non‐metropolitan and rural areas and describes the state’s strategies and actions
related to housing, including Public Housing and Section 8, special needs (including HIV/AIDS),
homeless, community development, lead based paint, anti‐poverty and fair housing. The Draft is
the annual action plan which describes the methods of distribution, and geographic funding
objectives for the U.S. Department of Housing and Urban Development FY 2008 HOME, CDBG,
HOPWA and ESG federal funds. The Draft will contain a Citizen Participation Plan governing
procedures to secure citizen input for the use of HOME, CDBG, HOPWA and ESG resources for
FY 2008. The Draft has been prepared pursuant to applicable federal regulations (24 CFR, PART
91).
The Draft will be available for review and comment at the offices of the Arizona Department of
Housing, 1110 W. Washington, Suite 310, Phoenix, AZ 85007 from 8:00 a.m. to 5:00 p.m., Monday
through Friday, beginning March 27, 2008. The Draft will also be posted to the Department’s
website on March 27, 2008: www.housingaz.com. Written comments on the Draft will be
accepted from March 27, 2008, ending at 5:00 p.m. on April 25, 2008. Written comments on the
Draft are encouraged and may be forwarded to: Programs, 1110 W. Washington, Suite, 310,
Phoenix, AZ 85007; written comments may be emailed to Info@housingaz.com.
To continue gathering public comment on the Draft, a public hearing will be held on April 25,
2008 from 10:00 a.m. to noon p.m. in the training room at the offices of the Arizona Department of
Housing, 1110 W. Washington, Suite 310, Phoenix, Arizona 85007.
Any person requiring a special accommodation at this hearing because of a disability, physical
impairment or English language deficiency should contact the Arizona Department of Housing at
(602) 771‐1000 or at our TTY number (602) 771‐1001 at least five days before the scheduled
hearing.
Publication Date: March 27, 2008

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