Today, Jan. 6, 2025, HUD published a Final Rule revising the HOME Investment Partnerships program in the Federal Register.
The new regulations are intended to update, simplify, or streamline requirements, better align the program with other federal housing programs, and implement recent amendments to the HOME statute.
The final rule follows the publication of the proposed rule on May 29, 2024, and includes minor revisions to the Community Development Block Grant and Section 8 housing choice voucher program regulations consistent with HOME program changes. The final rule applies to developments for which HOME funds are committed on or after 30 days after publication of the final rule in the Federal Register.
Highlights on HOME Final Rule
Here are some highlights of the Final Rule, as identified by HUD. HOME will:
- Expand access to community housing development organization (CHDO) set-aside funds by neighborhood-based nonprofit organizations.
- Clarify homeownership requirements to improve compliance and program outcomes for homebuyers and implement new provisions for community land trusts to exercise preemptive purchase rights.
- Better align HOME rental housing with other Federal rental assistance programs.
- Simplify requirements applicable to small rental housing projects.
- Make HOME tenant-based rental assistance work better for vulnerable populations.
- Strengthen tenant rights and protections for occupants of HOME-assisted rental units and recipients of HOME tenant-based rental assistance.
- Establish a new method for determining maximum per-unit subsidy limits.
- Provide incentives to incorporate green building technologies.
HUD has NOT extended the notice to evict to 60 days as originally proposed. The 30-day notice required by the HOME statute continues to apply.
Other notable changes in the HOME Final Rule
When a family receives rental assistance, whether tenant- or project-based, the other program rent is acceptable for HOME. The HOME Low and High rents do not apply. This is an improvement over the proposed rules that would have required the tenant portion of the rent to be capped at the HOME rent limits.
LIHTC rents are acceptable for low HOME units. This removes the Low HOME cap on LIHTC units that are Low HOME.
HOME is incorporating the HOTMA safe harbors for other means-tested programs, such as TANF and the LIHTC. This is a change of policy from past-stated CPD intent. It allows for better alignment with other housing programs implementing HOTMA.
HOME background
The HOME Investment Partnerships Program (HOME) provides formula grants to states and localities that communities use – often in partnership with local nonprofit groups – to fund a wide range of activities, including building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people. HOME is the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. State and local governments nationwide rely on annual formula HOME funds to develop meaningful projects and provide essential services that create sustainable, healthy, and prosperous communities, particularly for low- and moderate-income persons.
The HOME program is designed to provide states and localities the flexibility to create and administer affordable housing programs that meet their own needs and priorities. Participating Jurisdictions (PJs) choose the location, tenure, and type of housing they will invest in. However, there are Federal rules administered by HUD that put certain constraints on how HOME funds can be used. HUD’s regulations seek to balance flexibility for PJs to use funds that best fit their local needs while ensuring funds are spent prudently and not counter to national priorities.
The intended impact of the HOME Final Rule
The final rule supports the Biden Administration’s commitment to streamline and modernize programs to make them easier to use and reduce the burden on participating jurisdictions. It will also increase flexibility for participating jurisdictions and other program participants while adhering to statutory intent, requiring responsible management of state and local HOME programs, and better-aligning HOME with other affordable housing funding sources to benefit tenants and residents.
The changes will incentivize investment in vulnerable communities while signaling the Federal government’s willingness to support these investments. Recognizing HOME’s important role in community development nationwide, HUD looks to enable state and local governments to encourage, build, and expand activities that revitalize communities.
