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CPD-2600-DC-0019

Community Planning and Development

U.S. Department of Housing and Urban Development

Self-Help Homeownership Opportunity Program (SHOP)

Table Of Contents CPD-2600-DC-0019 Page 2 of 77

I. BASIC INFORMATION

A. Summary

B. Agency Contact(s)

II. ELIGIBILITY

A. Eligible Applicants

B. Eligible Applications

C. Cost Sharing or Matching

III. PROGRAM DESCRIPTION

A. Purpose

B. Goals and Objectives

C. Authority

D. Unallowable Costs

E. Indirect Costs

SHOP Program History

F. Other Information

IV. APPLICATION CONTENTS AND FORMAT

A. Standard Forms, Assurances, and Certifications 25

B. Budget

C. Narratives and Other Attachments

D. Other Application Content

V. APPLICATION REVIEW INFORMATION

A. Threshold Review

B. Merit Review

C. Risk Review

D. Selection Process

E. Award Notices

VI. SUBMISSION REQUIREMENTS AND

DEADLINES

A. Deadlines

B. Submission Methods

C. Other Submission Information

D. False Statements

VII. POST-AWARD REQUIREMENTS AND

ADMINISTRATION

A. Administrative, National and Departmental Policy

Requirements, and General Terms and Conditions

B. Environmental Requirements

C. Remedies for Noncompliance

D. Reporting

VIII. CONTACT AND SUPPORT

A. Agency Contact

B. Grants.gov

C. SAM.gov

D. Debriefing

E. Applicant Experience Survey

F. Other Online Resources

APPENDIX

Appendix I. Definitions

TABLE OF CONTENTS

Before You Begin CPD-2600-DC-0019 Page 3 of 77

If you are a good candidate for this funding opportunity, register in the required systems and review the application materials. If you are already registered, confirm that your information is current and active.

SAM.gov Registration You must have an active and up-to-date account with SAM.gov, at the time of application and throughout the life of any award.

To register, go to SAM.gov Entity Registration and click Get Started. From the same page, you can also click the Entity Registration Checklist for the information you will need to register.

It can take several weeks to register in SAM.gov, so get started now if you are planning to apply. SAM.gov also provides each organization with a unique entity identifier (UEI). A valid UEI is required to apply for funding.

Grants.gov Registration You must have an active Grants.gov registration. This requires a Login.gov registration as well. See step-by-step instructions at the Grants.gov Quick Start Guide for Applicants. You must apply for funding using Grants.gov, unless HUD has approved your waiver request.

See Section VI.B. Submission Methods.

Find the Application Package Use the Grants Search at Grants.gov and search for opportunity number CPD-2600-DC-0019 . The application package has all the online forms you need to apply. You also need to access the Download Instructions link and review the content before you apply.

If you have other technical difficulties using Grants.gov, contact the Support Center on Grants.gov.

To get updates on changes to this notice of funding opportunity (NOFO), click Subscribe from the View Grant Opportunity page on Grants.gov.

Application Deadline

HUD Listserv To get email alerts about current and future funding opportunities, subscribe to HUD's Funding Opportunities listserv.

BEFORE YOU BEGIN

https://sam.gov/ https://sam.gov/content/entity-registration https://sam.gov/ https://sam.gov/ https://grants.gov/ https://login.gov https://www.grants.gov/quick-start-guide/applicants https://grants.gov/ https://grants.gov/ https://grants.gov/ https://grants.gov/ https://www.hud.gov/subscribe/signup?listname=HUD%20Funding%20Opportunities&list=HUD-FUNDING-OPPORTUNITIES-L https://www.hud.gov/subscribe/signup?listname=HUD%20Funding%20Opportunities&list=HUD-FUNDING-OPPORTUNITIES-L

I. Basic Information

II. Eligibility III. Program Description

IV. Application Contents and

Format

V. Application Review

Information

VI. Submission Requirements and

Deadlines

VII. Post-Award Requirements and

Administration

VIII. Contact and Support

Appendix

I. BASIC INFORMATION

I. Basic Information

A. Summary

B. Agency Contact(s)

II. Eligibility III. Program Description

IV. Application Contents and

Format

V. Application Review

Information

VI. Submission Requirements and

Deadlines

VII. Post-Award Requirements and

Administration

VIII. Contact and

I. Basic Information CPD-2600-DC-0019 Page 5 of 77

I. BASIC INFORMATION See Contact and Support section of this NOFO.

A. Summary Federal Agency Name:

United States Department of Housing and Urban Development (HUD) HUD Program Office:

Community Planning and Development Announcement Type:

Initial Program Type:

Discretionary Paperwork Reduction Act Information:

2506-0157 Due Date for Intergovernmental Review:

See Section VI.C.1.

1. NOFO Summary The SHOP grant program provides competitive awards to national and regional nonprofit organizations and consortia to purchase home sites and develop or improve the infrastructure needed to set the stage for sweat equity and volunteer-based homeownership programs and to promote the production of affordable housing for low-income persons and families, Key Facts Opportunity Name:

Self-Help Homeownership Opportunity Program

(SHOP)

Opportunity Number:

CPD-2600-DC-0019

Federal Assistance Listing(s):

14.247

Key Dates Application Due Date:

11:59:59 PM Eastern Time on:

07/15/2026 Anticipated Award Date:

08/06/2026 Estimated Performance Period Start Date:

09/22/2026 Estimated Performance Period End Date:

09/22/2028

II. Eligibility III. Program Description

IV. Application Contents and

Format

V. Application Review

Information

VI. Submission Requirements and

Deadlines

VII. Post-Award Requirements and

Administration

VIII. Contact and

I. Basic Information CPD-2600-DC-0019 Page 6 of 77 including veterans, homeless persons, first responders, and the physically disabled.

2. Funding Details Type of Funding Instrument G (Grant)

Available Funds Funding of approximately $24,000,000 is available through this NOFO.

Additional funds may become available for award. Use of these funds is subject to statutory constraints. All awards are subject to the selection process contained in this NOFO.

Funding of $24,000,000 includes $12,000,000 of FY2025 funds and $12,000,000 of FY2024 funds.

Estimated Number of Awards 7 awards from available funding Length of Performance Period:

24-month project period and budget period 36-month project period and budget period Length of Periods Explanation:

All SHOP units must be developed and conveyed within 24 months the end of the applicable period of performance if the local affiliate or consortium plans to develop four or fewer SHOP units. SHOP grantees must use all SHOP grant funds within 24 months of the date that grant funds are available for drawdown in the Grantee's line of credit. If the local affiliate or consortium plans to produce five or more units, they must use all SHOP grant funds within 36 months of the date that grant funds are available for drawdown in the Grantee's line of credit.

• HUD will establish the applicable period of performance in the approved HUD financial system.

• Grantees are subject to applicable expenditure deadlines.

• HUD may grant an extension to a Grantee's performance schedule only when justified by good cause.

• HUD will require corrective actions when a Grantee fails to satisfy its approved schedule.

• HUD will note any failure to perform as required under the award as poor performance which may negatively affect an applicant's future SHOP funding.

B. Agency Contact(s) See Contact and Support section of this NOFO.

II. ELIGIBILITY

II. Eligibility

A. Eligible Applicants

B. Eligible Applications

C. Cost Sharing or Matching

II. Eligibility III. Program Description

IV. Application Contents and

Format

V. Application Review

Information

VI. Submission Requirements and

Deadlines

VII. Post-Award Requirements and

Administration

VIII. Contact and

II. Eligibility III. Program Description

IV. Application Contents and

Format

V. Application Review

Information

VI. Submission Requirements and

Deadlines

VII. Post-Award Requirements and

Administration

VIII. Contact and

II. Eligibility CPD-2600-DC-0019 Page 8 of 77

II. ELIGIBILITY

A. Eligible Applicants If your organization is not an eligible applicant, your application won't be reviewed or scored, and you won't receive funding from HUD.

1. Eligible Entity Types:

12 (Nonprofits having a 501(c)(3) status with the IRS, other than institutions of higher education) 25 (Others (see text field entitled "Additional Information on Eligibility" for clarification)) Additional Information on Eligibility You cannot apply as an individual.

Faith-based organizations may apply just like any other organization. HUD does not have any policies or practices that unfairly target these institutions.

a. Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at 24 CFR 5.109, and subject to the protections and requirements of 42 U.S.C. § 2000bb et seq. HUD will not, in the selection of recipients, discriminate against an organization based on the organization's religious character, affiliation, or exercise.

b. A faith-based organization that participates in this program will retain its independence and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law, including the Free Speech and Free Exercise Clauses of the Constitution, 42 U.S.C. § 2000bb et seq., 42 U.S.C. § 238n, 42 U.S.C.

§ 18113, 42 U.S.C. §§ 2000e-1(a) and 2000e-2(e), 42 U.S.C. § 12113(d), and the Weldon Amendment, among others. Religious accommodations may also be sought under many of these religious freedom and conscience protection laws. A religious organization's exemption from the Federal prohibition on employment discrimination of the basis of religion, set forth in section 702(a) of the Civil Rights Act of 1964 (442 U.S.C. 2000e-1) is not forfeited when the organization participates in a HUD program.

See 24 C.F.R. 5.109(i).

c. Religious accommodations may also be sought under many of these religious freedom and conscience protection laws. Nothing in this Notice shall interfere with rights of such Eligible Applicants, as provided under the Religious Freedom Restoration Act of 1993, Pub. L. No. 103-141, 107 Stat. 1488, codified at 42 U.S.C. § 2000bb through 42 U.S.C. § 2, nor the processes and guarantees provided in HUD regulations regarding applicants' activities and assessments (see 24 CFR 5.110)

Additional Eligible Applicant Requirements:

Nonprofit Status – Applicants must be eligible public or private nonprofit organization under Federal, state or tribal law.

Applicant Service Area – Applicants must be a national or regional organization or consortia (see Section III.A. "Eligible SHOP Applicants" of this NOFO) that serves at least two states.

https://www.ecfr.gov/current/title-24/part-5/appendix-Appendix%20A%20to%20Subpart%20A%20of%20Part%205 https://www.federalregister.gov/documents/2025/02/12/2025-02611/eradicating-anti-christian-bias https://www.federalregister.gov/documents/2025/02/12/2025-02611/eradicating-anti-christian-bias

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Administration

VIII. Contact and

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2. Restrictions

a. Statutory and Regulatory Requirements You must meet the current General Statutory and Regulatory Eligibility Requirements. If you do not meet these requirements, your application won't be scored, and you won't receive funding from HUD. This is a threshold requirement for all HUD funding.

Individuals, foreign entities, and sole proprietorship organizations are not eligible to compete for, or receive, awards made under this announcement.

b. Resolution of Civil Rights Matters If you have any outstanding or unresolved judgments for violating civil rights laws, you must settle them before you apply. If you don't, settle the civil rights law violations before you apply, your application won't be scored, and you won't receive funding from HUD. This is a threshold requirement for all HUD funding.

B. Eligible Applications

1. An application from an eligible entity is considered for funding if it meets basic threshold requirements and passes merit review.

2. Your application must support the goals of this NOFO.

3. Awards made under this NOFO will not be used to conduct activities that subsidize or facilitate illegal racial preferences or other forms of illegal discrimination, including activities where race or intentional proxies for race will be used as a selection criterion for employment or program participation.

Eligible applicants include public or private nonprofit organizations and faith based organizations, or a consortium of public or private nonprofit organizations.

• The term "you" as used in this NOFO refers to the SHOP applicant, including all consortium members. The term "consortium" refers to all consortium members.

• The term "grantee" refers to a successful SHOP applicant, including all consortium members, that have been awarded SHOP grant funds under this NOFO.

• The term "affiliate" refers to an eligible nonprofit organization that is an affiliate of a SHOP grantee.

Eligible applicants are defined as:

National Organization: A public or private nonprofit organization that carries out self-help homeownership housing activities or funds affiliates that carry out these activities on a national scale.

Regional Organization: A public or private nonprofit organization that carries out self-help homeownership housing activities or funds affiliates that carry out these activities on a regional scale.

• A regional area is a geographic area (See Section IV.C.), such as the Southwest or Northeast that includes at least two states.

https://www.hud.gov/sites/dfiles/OCHCO/documents/Eligibility-Requirements-Addendum-FY2025.pdf

II. Eligibility III. Program Description

IV. Application Contents and

Format

V. Application Review

Information

VI. Submission Requirements and

Deadlines

VII. Post-Award Requirements and

Administration

VIII. Contact and

II. Eligibility CPD-2600-DC-0019 Page 10 of 77

• The states in the region need not be contiguous, and the service area of the organization need not precisely conform to state boundaries.

Consortium: Two or more public or private nonprofit organizations located in at least two states that enter into an agreement to submit one (1) application for SHOP grant funds to carry out self-help homeownership housing activities on a national or regional basis.

Individual consortium members may carry out self-help homeownership housing activities or fund affiliates to carry out these activities.

The consortium must designate one (1) member as the lead entity to act on behalf of all consortium members.

• The lead entity is responsible and accountable for the timely performance and compliance of all consortium members.

• The consortium must execute a new written agreement with each affiliate that is receiving funding under the consortium's FY2024/2025 SHOP funds. The consortium cannot amend a prior written agreement.

All applicants must demonstrate the following:

• Show that you, your affiliates, or consortium members have the capacity and experience to provide or facilitate self-help homeownership opportunities on a national or regional basis.

• Evidence that you will directly undertake eligible SHOP activities and/or enter into a written agreement with one or more nonprofit affiliate organizations to carry out eligible activities.

Your application is considered for funding if it meets the application review requirements in Section V. of this NOFO. Applicants may only submit one (1) application.

Application and Page Format. You must submit your SHOP application in an 8.5 inch by 11-inch page size format, using a standard 12-point font and 1-inch margins. Text in tables must not be less than a 9-point font. HUD will not consider material shown in a smaller font size. Pages for each application section must be numbered sequentially starting with "1." For sections with page limits, HUD will not consider information on pages that exceed the page limit (See Section V.A.1. Application Information Criteria of this NOFO).

All communications between HUD and SHOP applicants must be in English. The application must be received through Grants.gov in English.

Application Content. The application consists of six sections:

1. Standard Forms.

2. Applicant Eligibility.

3. SHOP Program Design and Scope of Work.

4. Rating Factors.

5. Appendices; and

6. Forms, Certifications, and Assurances.

II. Eligibility III. Program Description

IV. Application Contents and

Format

V. Application Review

Information

VI. Submission Requirements and

Deadlines

VII. Post-Award Requirements and

Administration

VIII. Contact and

II. Eligibility CPD-2600-DC-0019 Page 11 of 77

Page limits are imposed on both the Program Design and Scope of Work (Section IV.C), and the Merit Review (Section V.B) sections of this NOFO. Required documents submitted in appendices do not count toward your application page limits. HUD will not consider any supplemental information that is not required by this NOFO, or information that exceeds the page limits established by this NOFO.

Refer to Appendix for an Application Checklist that identifies the elements required for a complete application submission.

Consortium Application. If you are applying as a consortium, you must:

• Submit an application that demonstrates that the consortium members are undertaking a single SHOP program.

• The lead entity must file your application on behalf of all consortium members.

• All consortium members must be identified in your application.

• All consortium members must receive SHOP grant funds.

• Application must propose to use a significant amount of SHOP grant funds in each state represented by your consortium members.

Individual program designs for separate consortium members or their affiliates will not be considered by HUD in scoring your application.

Self-Help Homeownership Housing Experience – You must demonstrate experience in providing or facilitating self-help homeownership housing opportunities. This is evidenced by the successful production and completion of at least 30 affordable housing units in a national or regional area, in at least two states, within the 36-month period preceding the submission of your SHOP application.

• This may include self-help homeownership housing units completed by one or more of your affiliates during this period. These units must have been completed in accordance with a written agreement between you and your affiliate(s).

• For a dwelling to qualify as a self-help homeownership housing unit homebuyer (defined as the individual or individuals who own the completed unit) must have contributed a significant amount of sweat-equity toward the construction or rehabilitation of the unit as set forth in Section III.F. Other Information.

Consortium Agreement. All consortium members must sign and date a written Consortium Agreement for the purpose of applying for SHOP grant funds and carrying out SHOP activities in compliance with this NOFO.

• This Consortium Agreement must designate a lead entity authorized to submit the SHOP application on behalf of all consortium members.

• The Consortium Agreement must also state that the lead entity will be accountable for the performance and compliance of the Consortium's SHOP program in accordance with all requirements of this NOFO, and that each consortium member is responsible and accountable for the performance and compliance of its affiliates.

Code of Conduct. You must develop, maintain and follow a written code of conduct in

II. Eligibility III. Program Description

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Format

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II. Eligibility CPD-2600-DC-0019 Page 12 of 77 accordance with 2 CFR 200.318. Your Code of Conduct must be dated and signed by your Executive Director, or the Chair of the governing body of your organization.

Number of SHOP Units. The SHOP statute requires the Grantee (national and regional organization or consortia lead entity) to develop no fewer than 30 SHOP units. The average SHOP grant expenditure on each SHOP unit for the combined costs of land acquisition and infrastructure improvements cannot exceed $25,000 per homeownership unit.

Geographic Service Area. You must use SHOP grant funds in at least two states in a national or regional service area.

Eligible Activities. You must propose using SHOP grant funds only for the cost of eligible SHOP activities. The following three (3) categories are eligible SHOP activities:

• Land Acquisition. You may acquire land (including financing and reasonable and customary closing costs) for the purpose of developing or rehabilitating SHOP units is an eligible activity.

o If you or your affiliate use SHOP grant funds to acquire land with a building or other improvement affixed to it, you or your affiliate must allocate a portion of the acquisition cost to the land and a portion of the acquisition cost to the building or other improvements. Only the portion of the acquisition cost allocated to the land is an eligible land acquisition cost. Land acquisition is subject to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (URA) (42 U.S.C. 4601 et seq.).

o You or your affiliate must maintain ownership of the land acquired with SHOP grant funds through completion of the SHOP unit. HUD may grant an exception to this requirement for units also assisted through the United States Department of Agriculture's (USDA) Mutual Self-Help Housing Technical Assistance grants when homebuyer has a USDA Section 502 Direct Loan. The Grantee must submit a written request to HUD for an exception prior to the investment of any SHOP grant funds for land acquisition and/or infrastructure improvements.

o On or after the publication date of this NOFO, you and your affiliate may use non-grant funds, in accordance with any requirements that govern the other funds, to acquire land. This includes land acquired before completion of the environmental review process.

▪ You may use SHOP grant funds to reimburse these costs after your

SHOP Grant Agreement has been executed, and the required environmental review process has been successfully completed.

▪ Any advances to acquire land prior to successful completion of the required environmental review process are made at the risk of the Grantee and its affiliates, and reimbursement from SHOP grant funds for such advances will depend on the result of the environmental review.

▪ These pre-agreement costs must be identified in your SHOP application.

Refer to this SHOP NOFO Section III.D.

• Infrastructure Improvements. The installation, extension, construction, rehabilitation, II. Eligibility III. Program Description

IV. Application Contents and

Format

V. Application Review

Information

VI. Submission Requirements and

Deadlines

VII. Post-Award Requirements and

Administration

VIII. Contact and

II. Eligibility CPD-2600-DC-0019 Page 13 of 77 or other improvement of utilities and other infrastructure (including the removal of environmental hazards) of SHOP units are eligible activities. Eligible infrastructure improvement activities include the cost of utility and hook-up fees. Financing and closing costs are ineligible infrastructure improvement activities.

o You or your affiliate must own the land on which infrastructure improvements are made for the SHOP unit. HUD may grant an exception to the ownership requirement for units also assisted through the USDA's Mutual Self-Help Technical Assistance grants for potential homebuyer receiving a USDA Section 502 Direct Loan. The Grantee must submit a written request to HUD for an exception to this requirement prior to the investment of any SHOP grant funds for land acquisition and/or infrastructure improvements.

o You or your affiliate cannot incur infrastructure improvement costs before successfully completing the required environmental review process.

• Planning and Administration. Planning and administration costs related to the SHOP grant program is an eligible activity for you and your affiliates. Applicants may allocate a maximum of 10 percent of SHOP grant funds for Planning and Administration costs between the following categories: 1) Planning and Administration expenses of the applicant; and 2) Planning and Administration expenses of the affiliate(s). Eligible costs include staff and overhead costs to carry out your SHOP grant program. For example, providing information to the public about your SHOP grant program and activities.

o Eligible pre-agreement costs can only be incurred on or after the publication date of this NOFO. You may carry out the eligible activities yourself or fund affiliates to carry out your eligible activities. Refer Section II.A. for additional guidance on pre-agreement costs, ineligible costs, and other restrictions.

o The indirect costs (such as rent and utilities) of you and your affiliates are also eligible. You must charge indirect costs in accordance with 2 CFR part 200, "Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards" and the requirements of the SHOP grant agreement.

In addition, eligible costs include expenses to inform the public about your SHOP grant program and activities in a manner consistent with civil rights obligations as described below:

In accordance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and HUD's implementing regulations at 24 CFR part 8, and Title II of the Americans with Disabilities Act (42 U.S.C. p 12131-12134) and the implementing regulation at 28 CFR part 35, the programs services, and activities funded through this NOFO must be accessible to and usable by persons with disabilities. All training sessions and meetings must be held in facilities that are physically accessible to persons with disabilities. Where physical accessibility is not achievable, recipients and subrecipients must give priority to alternative methods of involvement and product delivery that are accessible to and usable by individuals with disabilities and offer programs, services, and activities to individuals with disabilities in the most integrated setting appropriate.

Recipients and subrecipients must also provide effective communication for individuals with disabilities. Auxiliary aids or services and reasonable accommodations must be

II. Eligibility III. Program Description

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II. Eligibility CPD-2600-DC-0019 Page 14 of 77 provided to ensure equal participation by individuals with disabilities.

You must use either the income limits for the HOME Investment Partnerships Program, which are updated annually and available at: https://www.huduser.gov/portal/datasets/HOME- Income-limits.html or the United States Department of Agriculture's 502 Homeownership Direct Loan Program Low-Income Limits, if an individual or family is using financing through this program.

If you use the income limits for the HOME Investment Partnerships Program, then you must also use one (1) of the following three (3) definitions of "annual income" to determine whether a homebuyer is income-eligible:

1. Annual Income as defined at 24 CFR 5.609; or

2. Adjusted Gross Income as defined for purposes of reporting under the IRS Form

1040 series for individual Federal annual income tax purposes: or

3. Grantee Definition. Grantees must use income limits for the HOME Investment

Partnerships Program, which are updated annually and available at:

https://www.huduser.gov/portal/datasets/HOME-Income-limits.html. This definition must be included in your SHOP Program Design and Scope of Work and approved by

HUD.

Sweat Equity. The SHOP statute requires that self-help homeownership housing opportunities be provided "under which the homeowner contributes a significant amount of sweat equity toward the construction of the new dwelling." Sweat equity includes home construction training but excludes homebuyer counseling and home maintenance training.

• Minimum Sweat Equity Contribution. You must require each SHOP homebuyer to contribute a minimum number of sweat equity hours toward the construction or rehabilitation of the homebuyer's SHOP unit and/or the homes of other homebuyers participating in the self-help homeownership housing program administered by you or your affiliates.

o If the homebuyer is one individual, the homebuyer must contribute a minimum of 50 hours of sweat equity.

o If the homebuyer is more than one individual, the homebuyer must contribute a minimum of 100 hours of sweat equity.

o The only exception to the minimum sweat equity contribution requirement is that HUD may allow volunteers to provide the required sweat equity for a homebuyer who becomes unable to complete his/her sweat equity requirement due to military deployment.

o You must make reasonable accommodations for persons with disabilities, whenever necessary, to afford an individual with a disability with an equal opportunity to use and enjoy a home. (Refer to Section III.F. for additional information.)

Homebuyer Financial Contribution. The SHOP statute requires that dwellings developed in connection with SHOP assistance be provided to "families and persons who otherwise would be unable to afford to purchase a dwelling." (Section III.F.)

https://www.huduser.gov/portal/datasets/HOME-Income-limits.html https://www.huduser.gov/portal/datasets/HOME-Income-limits.html

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Sale Price. The SHOP statute requires that dwellings constructed in connection with SHOP assistance be made "available at prices below the prevailing market prices." (Section III.F.)

Mortgages and Other Loans. The homebuyer's sweat equity contribution cannot be mortgaged or otherwise restricted upon the future sale of the SHOP unit. (Section III.F.)

Volunteer Labor. The SHOP statute requires that activities to develop SHOP-assisted self-help homeownership housing "involve community participation in which volunteers assist in the construction or rehabilitation of dwellings." (Section III.F.)

Leveraged Resources. The SHOP statute requires that SHOP grantees use their SHOP grant amounts in a manner that "leverages other sources of funding, including private or other public funds," to complete construction or rehabilitation of their SHOP units.

Also see Section IV.A., Standard Forms, Assurances, and Format, for additional required documentation that will affect the threshold review of your application

C. Cost Sharing or Matching This Program does not require cost sharing or matching but does require leverage, as described below.

There is no matching requirement for SHOP. However, you must leverage resources for the cost of construction and/or rehabilitation of self-help homeownership housing units assisted with SHOP grant funds, and for any other program costs that are not funded with SHOP grant funds. Refer to Rating Factor 4: Leveraging Resources.

https://www.ecfr.gov/current/title-2/part-200/section-200.1#p-200.1(Cost%20sharing%20or%20matching)

III. PROGRAM DESCRIPTION

III. Program Description

A. Purpose

B. Goals and Objectives

C. Authority

D. Unallowable Costs

E. Indirect Costs

F.

II. Eligibility III. Program Description

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Format

V. Application Review

Information

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Deadlines

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Administration

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III. PROGRAM DESCRIPTION

A. Purpose The Self-Help Homeownership Opportunity Program (SHOP) awards grant funds to eligible national and regional nonprofit organizations and consortia to purchase home sites and develop or improve the infrastructure needed to set the stage for sweat equity and volunteer-based homeownership programs and production of affordable housing for low-income persons and families. The program is a tool to promote the production of affordable housing for low-income persons and families, including veterans, homeless persons, first responders, and those who are physically disabled and families while fostering safe, stable neighborhoods in communities nationwide.

The SHOP units must be sold to homebuyers at prices below the prevailing market price.

Homebuyers must be low-income and must contribute a significant amount of sweat equity towards the development of the SHOP units. Reasonable accommodations must be provided, whenever necessary, to afford individuals with disabilities with equal opportunity to use and enjoy a dwelling. This includes making reasonable accommodations with respect to the sweat equity requirement. A homebuyer's sweat equity contribution cannot be mortgaged or otherwise restricted upon future sale of the SHOP unit. Volunteer labor is also required.

B. Goals and Objectives The SHOP program goals and objectives are:

• To facilitate innovative homeownership opportunities through the provision of self-help housing, where the homebuyer contributes a significant amount of sweat equity toward the construction of the new dwelling.

• To make funding available for land acquisition and infrastructure improvements which results in the development of affordable homes for purchase by qualified low-income individuals and families.

• To construct quality homes that comply with local building and safety codes and standards and are available at prices below the prevailing market prices;

• To fund applicants who will not operate illegal injection sites or "safe consumption sites" in violation of 21 U.S.C. 856, consistent with the requirements of 2 C.F.R.

200.300(a). Applicants will cooperate, assist and not interfere with law enforcement to enforce local laws such as those prohibiting public camping and drug use laws.

• To establish and foster a partnership between the Federal Government and organizations and consortia, resulting in efficient development of affordable housing with minimal governmental intervention, limited governmental regulation, and significant involvement by private entities;

• To fund activities developing housing involving community participation to assist with home construction; and

• To fund self-help housing projects on a geographically diverse basis, which includes

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III. Program Description CPD-2600-DC-0019 Page 18 of 77 areas having high housing costs, rural areas, and areas underserved by other homeownership opportunities that are populated by low-income families unable to buy a home.

C. Authority Funding for this program is provided by the Full-Year Continuing Appropriations and Extensions Act, 2025 (Public Law 119-4, approved March 15, 2025), Consolidated Appropriations Act, 2024 (Public Law 118-42, approved March 9, 2024).

SHOP is authorized by Section 11 of the Housing Opportunity Program Extension Act of 1996 (Public Law 104-120, as amended, 42 U.S.C. 12805 note, referred to as the "SHOP" statute).

D. Unallowable Costs Unallowable costs include any costs incurred that are not eligible in accordance with the requirements of this NOFO. This includes the following:

• Pre-agreement costs that do not meet all the SHOP requirements, including any pre-agreement cost that is:

o not identified in your SHOP application;

o incurred prior to the publication date of this NOFO; and/or o incurred by your affiliate and not approved in writing by you prior to its incurrence.

• Land acquisition costs for land that is owned by you or your affiliate before the date of the SHOP Grant Agreement (except when eligible as a pre-agreement cost).

• Land acquisition costs for land banking purposes (i.e. holding land for an indefinite period).

• Land acquisition costs for an acquisition that does not comply with the URA and the URA implementing regulations at 49 CFR part 24.

• Refinancing costs for land that you or your affiliate acquired before the publication date of this NOFO.

• Infrastructure improvement costs that you or your affiliate incurred before the publication date of this NOFO or before the completion date of the required environmental review process and HUD approval of a Request for Release of Funds, where applicable.

• Financing and closing costs for loans that you or your affiliate used to finance infrastructure improvement costs.

• Land acquisition costs for land that is not owned by you or your affiliate except when HUD approves an exception for SHOP units also assisted through USDA Mutual Self- Help Housing Technical Assistance grants when the homebuyer is receiving a USDA Section 502 Direct Loan.

• Infrastructure improvement costs for land that is not owned by you or your affiliate unless HUD approves an exception for SHOP units also assisted through USDA

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Mutual Self-Help Housing Technical Assistance grants for homebuyers receiving a USDA Section 502 Direct Loan.

• Demolition costs (except that the removal of environmental hazards is an eligible infrastructure improvement cost).

• Development costs that are not land acquisition or infrastructure improvement costs, such as building permitting fees, property taxes during the construction period, performance bonds, and landscaping.

• Impact fees that do not constitute payment for land acquisition and infrastructure improvements and are not required by a governmental entity authorized to impose such a fee.

• Construction, rehabilitation, or improvement costs of any dwelling unit, pre-existing or new.

• Homebuyer pre-purchase counseling and post-purchase counseling costs.

Other Restrictions: The average SHOP expenditure for the combined cost of land acquisition and infrastructure improvements cannot exceed $25,000 per SHOP unit.

E. Indirect Costs If you expect to charge indirect costs to the award, submit the Indirect Cost Information for Award Applicant/Recipient form (HUD-426) with your application.

If you have a Federally negotiated indirect cost rate, your application must clearly state the approved rate and distribution base. You must also include a letter or other documentation from the cognizant agency showing the approved rate.

• If your organization does not have a current negotiated rate (including provisional rate) and elects to use the de minimis rate, your application must clearly state you intend to use the de minimis rate of 15% of Modified Total Direct Costs (MTDC), as defined at 2

CFR 200.1.

• Costs must be consistently charged as either indirect or direct costs but may not be double charged or inconsistently charged as both, as described in 2 CFR 200.403.

• Once elected, the de minimis rate must be applied consistently for all Federal awards until the organization chooses to negotiate a rate, which the organization may apply to do at any time.

• Documentation of the decision to use the de minimis rate must be retained on file for audit.

SHOP Program History The following changes have been made from the published FY2024 SHOP NOFO:

• The percentage of grant funding that can be used Planning and Administration has been lowered to ten (10) percent from 20 percent.

• The point values for all Rating Factors have been redistributed among all the factors.

https://www.ecfr.gov/current/title-2/part-200/section-200.1#p-200.1(Indirect%20cost) https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-A/subject-group-ECFR2a6a0087862fd2c/section-200.1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-A/subject-group-ECFR2a6a0087862fd2c/section-200.1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E/subject-group-ECFRea20080eff2ea53/section-200.403

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• Grantee Definition of Annual Income has been updated.

• Homebuyer Income Eligibility and Eligible Household Income have been combined into the term, Homebuyer and Household Income Eligibility.

• Maximizing Affordable Housing Development preference points (valued at two points) is available for this NOFO.

• Promise Zones preference points have been removed.

Please thoroughly read the NOFO to ensure you meet all necessary requirements to apply for FY2024-2025 SHOP funds.

F. Other Information Beneficiary requirements for eligible SHOP homebuyers are as follows:

Homebuyer and Household Income Eligibility. You must have procedures to clearly ensure that assisted homebuyers are income eligible. The SHOP statute requires that funds benefit "low-income families and individuals who otherwise would be unable to afford to purchase a dwelling." Eligible homebuyer households are low-income individuals and families whose annual incomes do not exceed 80 percent of the median income for the area, as established by HUD with adjustments for household size. Grantees must use income limits for the HOME Investment Partnerships Program, which are updated annually and available at: https://www.huduser.gov/portal/datasets/HOME-Income-limits.html or when an individual or family participating in the SHOP program uses financing provided by the United States Department of Agriculture's 502 Homeownership Direct Loan Program, a grantee may use the low-income limits developed for that program to determine that individual or family's eligibility.

Additional Homebuyer Eligibility Requirements. Under Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). Only United States citizens or "qualified aliens" are eligible for benefits under this program.

Eligible forms of Homeownership. "Homeownership" and "own" mean fee simple title or a 99-year renewable lease, or an equivalent form of ownership approved by HUD. In Guam, the Northern Mariana Islands, the United States Virgin Islands, and American Samoa, the definition includes renewable leases of 40 years or more. For Indian Trust or restricted lands, the definition includes renewable leases of 50 years or more. Ownership may be subject to mortgages, deeds of trust, or other liens or instruments securing the debt on the property as allowable under State law.

Housing Counseling. If SHOP grantees or affiliates require housing counseling or refer eligible homebuyers to housing counseling, the housing counseling may be subject to HUD's Housing Counseling rule. Pursuant to 24 CFR 5.111, any housing counseling required under or provided in connection with any program administered by HUD shall be provided only by HUD-certified organizations and counselors per 24 CFR part 214.

Sweat Equity. The SHOP statute requires that self-help homeownership housing opportunities be provided "under which the homeowner contributes a significant amount of sweat equity toward the construction of the new dwelling".

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Sweat Equity Contribution Value. You must establish a fair and reasonable method for valuing a homebuyer's sweat equity contribution. Minimally, an average hourly rate or equivalent of $1,000 per 100 hours of sweat equity for multi-person households, or $500 equivalent per 50 hours of sweat equity for individual member households. The full value of the homebuyers sweat equity contribution must count as an equity contribution towards the purchase of the homebuyer's SHOP unit. Please refer to "Mortgages and Other Loans" further down in this section for additional guidance.

Minimum Sweat Equity Contribution. You must require each SHOP homebuyer to contribute a minimum number of sweat equity hours toward the construction or rehabilitation of the homebuyer's SHOP unit and/or the homes of other participating homebuyers in your or your affiliates' self-help homeownership housing program.

• An individual must contribute a minimum of 50 hours of sweat equity. If the homebuyer is more than one individual, the homebuyers must contribute a minimum of 100 hours of sweat equity. Sweat equity includes home construction training but excludes homebuyer counseling and home maintenance training.

• You may not make exceptions to this requirement. HUD may approve a request to allow volunteers to provide the required sweat equity for a homebuyer who becomes unable to complete his/her sweat equity requirement due to military deployment.

• You must make reasonable accommodations for persons with disabilities, whenever necessary, to afford a disabled individual the opportunity to use and enjoy a home. For example:

o Homebuyers with disabilities may work on less physical tasks or administrative tasks, receive an exemption from the sweat equity requirement, or use volunteers to provide the required sweat equity. If a homebuyer with disabilities uses volunteers, the homebuyer must enter into a written three-party agreement with the affiliate or the Grantee (if the Grantee directly administers the program) and the volunteer working on behalf of the homebuyer.

o HUD may approve a request to allow volunteers to provide the required sweat equity for a homebuyer who becomes unable to complete his/her sweat equity requirement due to his or her active-duty military service consistent with obligations under the Servicemembers' Civil Relief Act (SCRA).

Homebuyer Financial Contribution. The SHOP statute requires that dwellings developed with SHOP funds be provided to "families and persons who otherwise would be unable to afford to purchase a dwelling." You and your affiliates can only require the homebuyer make upfront financial contributions cash for a down payment, and other reasonable and customary closing costs of towards the purchase of the homebuyer's SHOP unit.

Mortgages and Other Loans. The homebuyer's sweat equity contribution cannot be mortgaged or otherwise restricted upon the future sale of the SHOP unit. To make the cost of homeownership transparent to homebuyers, at or before closing, you must provide each homebuyer with unit-specific information on the cost and carrying charges for the homebuyer's unit. This is similar to information required on the HUD-1 "Settlement Charges."

https://www.hud.gov/sites/documents/1.pdf.

https://www.hud.gov/sites/documents/1.pdf

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The following examples demonstrate compliance with the SHOP restrictions on mortgages:

• Sale Price Reduction. The SHOP unit sale price is reduced by the value of the homebuyer's sweat equity contribution. On the date of sale, the total amount of all mortgages and other loans for the purchase of the SHOP unit must not exceed the SHOP unit's reduced sale price plus reasonable and customary closing costs.

• Homebuyer Credit. The value of the homebuyer's sweat equity contribution is treated as a credit towards the SHOP unit sale price. On the date of sale, the total amount of all mortgages and other loans for the purchase of the SHOP unit must not exceed the SHOP unit's sale price plus reasonable and customary closing costs minus the credit for the homebuyer's sweat equity contribution.

Sale Price. The SHOP statute requires that dwellings constructed in connection with SHOP assistance be made "available at prices below the prevailing market prices." You must sell each SHOP unit below the appraised value of the property. Lenders may change reasonable and customary closing costs for the area in which the unit is located. The amount of the SHOP unit mortgage or loan may include these closing costs, but the amount of closing costs must be separately identified and note included in the sale price.

Volunteer Labor. The SHOP statute requires that activities to develop SHOP-assisted self-help homeownership housing "involve community participation in which volunteers assist in the construction or rehabilitation of dwellings." This means your SHOP Program Design must include volunteer labor. Volunteer labor is work performed by an individual without promise, expectation, or compensation for the work completed. Volunteer labor may be professional, or non-professional labor performed by community members, other volunteers, or household members who are not homebuyers.

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