HOME Investment Partnerships Program — Federal Affordable Housing Block Grant

The HOME Investment Partnerships Program (HOME), authorized by the Cranston-Gonzalez National Affordable Housing Act of 1990 (42 U.S.C. §§ 12701–12839) and administered by HUD, is the largest federal block grant specifically dedicated to creating and preserving affordable housing for low-income households. For the complementary community development block grant program, see community development block grants. For the tax credit program HOME often partners with, see Low-Income Housing Tax Credit (LIHTC). HOME distributes approximately $1.25–1.5 billion per year in formula grants to states and localities — called "participating jurisdictions" (PJs) — which use the funds for a wide range of affordable housing activities: constructing or rehabilitating rental housing, providing tenant-based rental assistance, assisting first-time homebuyers, and supporting Community Housing Development Organizations (CHDOs). Unlike the Low-Income Housing Tax Credit (LIHTC), which provides tax incentives to private developers, HOME provides direct flexible grants that PJs can tailor to local housing needs — gap financing for LIHTC projects, rehabilitation of single-family homes for owner-occupants, down payment assistance for low-income buyers, or emergency rental assistance. HOME is the financial backbone of most local affordable housing strategies and works best as a complement to LIHTC and other funding sources to make projects financially viable. All HOME-assisted units must remain affordable for a minimum period — typically 5–20 years depending on the type of assistance — enforced through deed restrictions and use agreements.

Current Law (2026)

Legal Authority

• 42 U.S.C. § 12702 — Purpose: expand the supply of decent, safe, sanitary, and affordable housing with particular emphasis on rental housing for very low-income and low-income Americans; strengthen the abilities of state and local governments to design and implement strategies for achieving adequate supplies of decent, affordable housing; extend and strengthen partnerships among all levels of government and the private sector; leverage private and public resources
• 42 U.S.C. § 12721 — Participating jurisdictions: states and local governments with populations of at least 500,000 (or which receive at least $500,000 in formula allocation) are automatically PJs; smaller jurisdictions may qualify through consortia; HUD designates PJs annually
• 42 U.S.C. § 12722 — Consolidated plans: PJs must submit a Consolidated Plan (ConPlan) to HUD every 3–5 years describing their housing and community development needs and strategies; the ConPlan covers HOME along with CDBG, ESG (Emergency Solutions Grants), and HOPWA; annual action plans describe the specific activities to be funded each year
• 42 U.S.C. § 12742 — Eligible activities: tenant-based rental assistance (HOME-TBRA); acquisition of standard housing; new construction of housing; reconstruction of substandard housing; rehabilitation of existing housing; site improvements; demolition and related activities; relocation expenses; administrative and planning costs (up to 10% of allocation)
• 42 U.S.C. § 12745 — Affordability requirements: HOME-assisted rental units must remain affordable for 5–20 years (depending on per-unit subsidy amount); homeownership units must remain affordable for 5–15 years; deed restrictions or use agreements must be recorded; HUD can recapture funds if affordability requirements are violated
• 42 U.S.C. § 12771 — Community Housing Development Organizations (CHDOs): nonprofits that are community-based, maintain accountability to low-income community residents, have experience in developing affordable housing; PJs must reserve at least 15% of HOME allocation for CHDO-developed or CHDO-owned housing; CHDOs are the nonprofit affordable housing development sector's primary connection to HOME funds

Implementing Regulations

HUD's operational regulations for the HOME program are at 24 CFR Part 92 — HOME Investment Partnerships Program. The Part translates the statutory framework into binding operational requirements for participating jurisdictions, CHDOs, developers, and project owners. Key provisions:

• § 92.101–92.107 — Participating jurisdiction designation: criteria for becoming a PJ, consortium formation rules, consolidated plan submission timeline, and HUD's authority to revoke PJ status for non-compliance
• § 92.205–92.209 — Eligible activities: the definitive list of permissible HOME uses — rental construction/rehab, homeownership acquisition/rehab, owner-occupied rehab, and TBRA; §92.209 specifies TBRA rules including eligible costs (rent and security deposits) and housing quality standards
• § 92.207 — Administrative costs: PJs may use up to 10% of their annual HOME allocation for program administration and planning; CHDO operating expense support is a separate allowance up to 5% (§92.208)
• § 92.214 — Prohibited activities: HOME funds cannot fund public housing operating subsidies, project reserve accounts (beyond narrow exceptions), or operating subsidies
• § 92.216–92.217 — Income targeting: at least 90% of HOME rental investments in each fiscal year must serve households at or below 60% AMI; homeownership assistance must serve households at or below 80% AMI
• § 92.218 — Match requirement: PJs must contribute non-federal matching funds equal to 25% of HOME expenditures each fiscal year; §92.222 allows HUD to reduce the match for fiscally distressed jurisdictions
• § 92.250 — Maximum per-unit subsidy: HOME subsidy cannot exceed the Section 221(d)(3) mortgage limits for the area; ensures HOME doesn't over-subsidize a single unit at the expense of overall production
• § 92.251 — Property standards: new construction must meet local codes (or IBC/IRC in their absence); rehab must address all health-and-safety deficiencies; lead-based paint requirements apply for pre-1978 housing
• § 92.252 — Affordability for rental housing: affordability periods of 5 years (under $15,000/unit), 10 years ($15,000–$40,000/unit), or 20 years ($40,000+/unit or new construction); rent caps tied to 30% of applicable income limit; must be enforced through recorded use agreements
• § 92.253 — Tenant protections: HOME tenants have the right to a written lease, good-cause protection against eviction, and advance notice when the affordability period ends (updated significantly in 2025 under 90 FR 888)
• § 92.254 — Affordability for homeownership: purchase price limits apply; resale or recapture mechanisms must ensure affordability is maintained during the affordability period; if the homeowner sells early, the PJ must recapture HOME funds or enforce a resale restriction
• § 92.300 — CHDO set-aside: the 15% CHDO reservation must be committed to CHDO-developed or CHDO-owned projects within 24 months; uncommitted CHDO set-aside funds are reallocated by HUD
• § 92.354 — Labor: HOME-funded construction contracts involving 12 or more assisted units must pay Davis-Bacon prevailing wages to construction workers — a significant cost factor in large rental projects
• § 92.355 — Lead-based paint: all HOME-assisted housing built before 1978 is subject to the Residential Lead-Based Paint Hazard Reduction Act; required activities depend on the type and amount of HOME assistance

Recent rulemakings: The most significant HOME regulatory update was the 2015 overhaul (80 FR 75935) that tightened CHDO certification requirements, strengthened property inspection standards, and overhauled tenant protections. The January 2025 rule (90 FR 888) made additional tenant protection enhancements under §92.253 — including strengthened good-cause eviction protections and advance notice requirements — and added new provisions for elder cottage housing opportunity (ECHO) units under §92.258.

How HOME Is Used

HOME is flexible — participating jurisdictions have broad discretion in how they deploy their allocation within federal requirements. Common uses:

Rental housing production and preservation The largest use of HOME funds. PJs commonly use HOME as "gap financing" in conjunction with LIHTC — the tax credit provides the equity, a mortgage provides primary debt, and HOME fills the remaining financing gap that would otherwise make the project infeasible. HOME can also fund standalone small rental projects (4–50 units) that may not be large enough for LIHTC.

Tenant-Based Rental Assistance (HOME-TBRA) HOME-funded rental vouchers that function similarly to Section 8 Housing Choice Vouchers. Unlike federal HCV, HOME-TBRA is locally administered, can target specific populations (domestic violence survivors, homeless individuals, youth aging out of foster care), and can provide assistance for shorter terms than federal vouchers.

Homebuyer assistance Down payment assistance, closing cost assistance, and soft second mortgages for first-time homebuyers at or below 80% AMI. HOME homebuyer assistance is one of the primary tools for expanding low-income homeownership.

Owner-occupied rehabilitation Grants or deferred loans to low-income homeowners for critical repairs — roof replacement, HVAC, accessibility modifications, lead paint abatement, weatherization. This is often the most visible local HOME activity in rural and suburban jurisdictions without large rental housing needs.

Community Housing Development Organizations (CHDOs) The 15% CHDO set-aside ensures that a meaningful share of HOME funds flows through community-based nonprofit housing developers, building the capacity of local nonprofit housing sectors.

Matching Requirement

HOME requires participating jurisdictions to match 25% of the federal funds they draw down — not their total allocation, but the amounts actually spent. Eligible match sources include:

• State and local government appropriations for affordable housing
• Proceeds from tax-exempt bond financing
• On-site and off-site infrastructure improvements donated by developers
• Waived fees, tax abatements, and donated services
• Private lending at below-market rates (the below-market portion counts as match)
• In-kind contributions of materials, labor, and equipment

The matching requirement ensures federal HOME funds leverage additional state, local, and private investment rather than simply substituting for existing resources.

How It Affects You

If you are a renter in affordable housing: HOME-assisted rental properties must maintain affordability for 5–20 years through recorded deed restrictions. If you live in a HOME-funded apartment, your rent is capped and your income must be at or below 60% of Area Median Income (AMI). Your property owner is subject to HUD's property standards and periodic inspections. HOME units must meet HUD Housing Quality Standards (HQS) — the same standards that apply to Section 8 voucher units. If you believe your HOME-assisted unit is substandard, contact your local participating jurisdiction's HOME program office or HUD's regional office.

If you are a low-income first-time homebuyer: Many state and local governments use HOME funds for down payment and closing cost assistance programs. These programs vary significantly by jurisdiction — grants, forgivable loans (which are forgiven after you remain in the home for a specified period), or deferred payment loans (repaid only when you sell or refinance). Search your state housing finance agency's website or your local community development department for "HOME homebuyer assistance" programs. Income limits are typically 80% AMI; the home must be your primary residence; and most programs require homebuyer education.

If you are a nonprofit housing developer or CHDO: HOME's 15% CHDO set-aside is the primary federal funding stream specifically reserved for nonprofit housing developers. To qualify as a CHDO, your organization must meet HUD's community accountability requirements (majority low-income representation on board or an advisory board of low-income residents), have demonstrated housing development experience, and be certified by the PJ. CHDOs must be the owner, developer, or sponsor (not just a contractor) of HOME-assisted projects. Contact your local PJ to understand their CHDO certification process and annual CHDO set-aside timeline.

If you are a local government official or planner: HOME's Consolidated Plan process is the primary mechanism for federal housing planning requirements. The ConPlan must assess housing needs, market conditions, existing resources, and gaps; identify priority needs; and describe a strategic plan for addressing them. HUD's CPD Maps tool provides demographic and housing data to support ConPlan preparation. HOME is most powerful as a gap-filler alongside LIHTC — jurisdictions with strong LIHTC pipelines can use HOME as the capital that makes tax credit projects pencil out.

HOME vs. CDBG vs. LIHTC

Pending Legislation and Recent Developments

• HOME funding has been subject to periodic appropriations reductions; advocacy groups consistently note that demand for HOME funds far exceeds supply — estimates suggest HOME funds only a fraction of the affordable units needed nationally
• HOME-ARP (HOME-American Rescue Plan): The American Rescue Plan Act (2021) provided a one-time $5 billion supplemental HOME allocation specifically for housing and services for individuals experiencing homelessness, those at risk of homelessness, and other vulnerable populations — the largest single HOME appropriation in the program's history
• Affordability period recapture enforcement has been strengthened following Inspector General findings that some HOME-assisted properties left affordability restrictions without HUD enforcement
• Proposed increases to HOME appropriations are regularly included in housing advocates' legislative agendas but face competition from other spending priorities in annual appropriations