The HOME Investment Partnerships Program
The HOME Investment Partnerships Program, commonly referred to as “HOME,” is a federal block grant program administered by the U.S. Department of Housing and Urban Development (HUD) that distributes approximately $2 billion each year to states and participating localities. Unlike the Community Development Block Grant — the other main HUD block grant to states and localities — HOME funds may only be used for activities that provide affordable housing for low-income households. While HOME funds are limited to affordable housing activities, the range of eligible uses that meet this requirement is very broad.
HOME funds flow directly from HUD to larger cities and counties and to states. Smaller localities are eligible to receive HOME funds indirectly, by applying to their state. The program comes with a matching requirement under which communities receiving HOME funds must match every dollar of HOME funds with 25 cents of local resources. This matching requirement may be met either with cash or in-kind contributions.
How can HOME funds be used?
As noted above, the eligible uses of HOME funds encompass a broad range of activities, including, but not limited to:
- Home purchase or rehabilitation financing assistance
- Construction or rehabilitation of housing for rent or ownership and related expenses, including site acquisition, demolition of dilapidated homes to make way for a HOME-assisted development, and relocation assistance
- Tenant-based rental assistance (similar to Section 8 housing vouchers, except that assistance expires after two years, unless renewed)
- Program planning and administration
In all cases, affordability must be maintained for at least 20 years for new construction and 5-15 years for acquisition and/or rehabilitation, depending on the award amount.
Photo courtesy of Community Development Corporation of Long Island
While the possible applications of funds are broad, limits apply to the incomes of families receiving assistance. In general, rental projects that receive HOME funds must benefit households with incomes below 60 percent of the area median income (AMI), while assistance related to homeownership must be used for households with incomes below 80 percent of AMI. Additional income restrictions apply depending on specific project details.
NOTE: This is a general summary of rather complex income eligibility and targeting rules. Click here to leave this site and view a more complete summary, including a comparison of HOME income limits and rents to those of other HUD programs. For even more details, visit the HUD program resources provided below.
Who administers the HOME program?
The HOME program was authorized by Congress in 1990 under Title II of the Cranston-Gonzalez National Affordable Housing Act, and is administered by HUD’s Office of Community Planning and Development. Funds are distributed by HUD to “Participating Jurisdictions” (PJs), which include all states and some larger localities. Local eligibility for direct assistance as a PJ is determined by a formula that incorporates measures of poverty and housing conditions.
Overall 60 percent of funds go directly to localities and 40 percent of HOME dollars go to states. A formula is used to determine individual allocations to PJs and states, with certain minimums. (States receive a minimum of $3 million annually while local PJs are normally guaranteed at least $500,000 per year.) In addition, 15 percent of a PJ’s funds must be used for homes that are developed, sponsored or owned by a “community-based housing development organization” (CHDO). Nonprofit organizations can receive CHDO designation by including representatives of low-income communities on their governing board.
To learn more about HOME, visit HUD’s program page. HOMEfires is the official policy newsletter of the HOME program, and features answers to specific questions about the program. HUD also issues Dashboard reports that provide a quick overview of a PJ’s performance in delivering affordable housing through the HOME program, as well as other reports documenting program outcomes.
The National Low Income Housing Coalition’s Advocates’ Guide [PDF] includes a thorough description of the HUD program and critiques it from an advocacy perspective.