According to a report in The Tennessean, the board of the Tennessee Housing and Development Agency (THDA) chose not to apply for the federal funding, even though the THDA staff and the state's TennCare Medicaid agency recommended pursuing the funds, which are allocated by the U.S. Department of Housing and Urban Development's (HUD).
THDA Executive Director Tim Fellman says the agency's board members made their decision over concerns that the program capped administrative costs at 5% of the federal grant, thus requiring the agency to finance the remaining administrative costs of the program.
‘There was a risk to THDA there,’ he says. ‘We could have handled the shortfall if we had to. But sometimes there's more of a cost than a benefit to chasing a federal program.’
Ralph Perrey, a THDA board member, adds that the board was also concerned that the program would require a 20-year commitment from the state, even though HUD would be offering only five years of guaranteed funding and would require annual congressional approval for each year afterward.