HOME Investment Partnerships Program.

What HOME does

The HOME Investment Partnerships Program (commonly "HOME") is a formula block grant administered by the U.S. Department of Housing and Urban Development (HUD) Office of Community Planning and Development. Authorized under Title II of the Cranston-Gonzalez National Affordable Housing Act of 1990, and implemented under 24 CFR Part 92, HOME is the federal government's largest dedicated source of flexible affordable housing funding.

Funds flow from HUD to approximately 600 Participating Jurisdictions (PJs) — all 50 states, the District of Columbia, Puerto Rico, the territories, and the larger units of local government (cities and urban counties). Each PJ then re-grants or loans HOME funds to private developers, nonprofits, and Public Housing Authorities for eligible activities. PJs must submit Consolidated Plans every 3-5 years and Annual Action Plans yearly.

What makes HOME distinctive is its flexibility. HOME can fund essentially any phase of the development life cycle — acquisition, predevelopment, new construction, rehabilitation, refinancing, or tenant-based rental assistance — and can be deployed standalone or layered with other federal, state, and local funding sources. The same statute reaches both rental development and homeownership, both new construction and preservation, both capital and operating use cases.

Program history

HOME was established by Congress in 1990 as part of a comprehensive overhaul of federal affordable housing policy following the savings and loan crisis. The program was designed to consolidate and replace several smaller HUD grant programs while giving state and local jurisdictions more flexibility in how funds are deployed.

Annual appropriations have varied. The post-sequester trough was approximately $950M in FY2016; the documented pre-sequester regular-appropriation peak was approximately $2.0B in FY2004. (A separate $2.25B ARRA appropriation that year funded the Tax Credit Assistance Program (TCAP) under the HOME budget heading, but TCAP was a separate LIHTC gap-financing program administered through state housing credit agencies — not HOME funds spent by Participating Jurisdictions.) FY2025 was funded at $1.25 billion under the Full-Year Continuing Appropriations and Extensions Act, 2025, which held HOME at the FY2024 level. The FY2026 appropriation remains pending as of May 2026.

The most significant recent regulatory update is HUD's HOME Final Rule ("Program Updates and Streamlining"), published January 6, 2025 at 90 FR 746. The original effective date was February 5, 2025; HUD subsequently delayed the effective date to April 20, 2025 for most provisions, with two specific provisions further delayed to April 30, 2026 by FR notice 2025-19626. The rule updates per-unit subsidy limits, modernizes lead-based paint and environmental review provisions, clarifies income determination procedures, and aligns several HOME provisions with HOTMA (Housing Opportunity Through Modernization Act). PJs are updating their written agreements and policies to reflect the new rule on a rolling basis tied to the staggered effective dates.

How it works

Funding mechanism

HOME funds are allocated by formula. 60% of annual funding goes to local Participating Jurisdictions; 40% goes to states. The formula considers population, inadequate housing, poverty, age of housing stock, and rental units in fiscal distress.

Eligible activities

PJs may use HOME funds for:

• Rental housing: New construction, acquisition, rehab, or refinance of affordable rental properties (the largest use category)
• Homebuyer programs: Down payment assistance, closing cost assistance, soft second mortgages
• Owner-occupied rehab: Home improvement loans and grants to existing low-income homeowners
• Tenant-Based Rental Assistance (TBRA): Short-term rental subsidies (Section 8-like but funded by HOME)

Match requirement

Statutory match under 42 U.S.C. § 12750 is 25% of HOME funds expended (i.e., $0.25 of non-federal match for each $1.00 of HOME funds). Several types of contributions count toward match: cash, donated land, donated materials, bond financing proceeds, the value of state/local tax abatements, and below-market interest rate loans. PJs in fiscal distress can receive partial or full match reductions under the statute. Note: annual HUD appropriations acts have, in some prior fiscal years, included riders reducing or temporarily waiving the HOME match requirement program-wide — confirm the current year's appropriations text before relying on a 25% match assumption in your underwriting.

Labor standards — Davis-Bacon (12-unit rule)

Per 24 CFR § 92.354(a), every contract for the construction (new construction or rehabilitation) of housing that includes 12 or more units assisted with HOME funds must contain a Davis-Bacon prevailing-wage provision, with wages determined by the U.S. Secretary of Labor. The 12-unit count is per project, not per contract; HOME-assisted units count whether the assistance is capital, soft debt, or development subsidy.

Projects with fewer than 12 HOME-assisted units are exempt from federal Davis-Bacon under HOME, though state or local prevailing-wage laws may still apply (notably in CA, NY, NJ, MA, and other "little Davis-Bacon" jurisdictions — verify your jurisdiction's threshold separately). HOME-assisted projects also remain subject to Section 3 employment and contracting requirements when total HOME assistance exceeds $300,000 (raised from $200,000 effective March 16, 2026 by HUD FR Doc. 2026-03002), regardless of unit count.

Income targeting and affordability

HOME rental funds must serve "low-income families" — households at or below 80% of Area Median Income (AMI) per 42 U.S.C. § 12704. Within that ceiling, the statute and 24 CFR § 92.252 layer two deeper-targeting rules:

• At least 90% of families receiving rental assistance (or 90% of assisted dwelling units) must have incomes at or below 60% AMI at initial occupancy (the "High HOME" tier — practitioner shorthand).
• In any project with 5+ HOME-assisted units, at least 20% of those units must serve "very low-income families" at or below 50% AMI (the "Low HOME" tier).
• High HOME Rent: lesser of fair market rent (FMR) or 30% of income at 65% AMI. Low HOME Rent: 30% of income at 50% AMI, capped at FMR.

"High HOME" / "Low HOME" are practitioner shorthand; the statute and regulations use "low-income families" and "very low-income families."

Affordability periods range from 5 to 20 years depending on subsidy depth per unit. New construction is generally 20 years; rehab varies based on per-unit investment.

LIHTC pairing

LIHTC is one of several programs that pair with HOME. When stacked, HOME typically serves as a soft second mortgage filling the gap between hard debt + tax-credit equity and total development cost, with HOME's deeper affordability tiers mapping to the lower-AMI units in mixed-AMI LIHTC buildings. The compliance overlay applies the strictest restriction across all programs: LIHTC's 15+15 compliance/extended-use frequently outruns HOME's 20-year new-construction period, so the LIHTC restriction governs through year 30.

For deal-structure detail — 9% vs 4% pairing patterns, income-averaging interactions, capital-stack math, and triple-stacking with HTC or OZ — see the dedicated guide: LIHTC Deal Structures Guide.

Recent regulatory and program changes

The HOME Final Rule (90 FR 746, January 6, 2025)

HUD's most consequential HOME rule since 2013, titled "Program Updates and Streamlining." Original effective date February 5, 2025; HUD delayed the effective date to April 20, 2025 for most provisions, with certain provisions further delayed through 2026. Key changes:

• Updated per-unit subsidy limits across all bedroom sizes and geographies
• Modernized environmental review procedures and lead-based paint requirements
• Aligned tenant income determination with HOTMA (income exclusions, asset rules, recertification timing)
• Clarified Community Housing Development Organization (CHDO) eligibility and operating support
• Expanded match flexibility
• Updated TBRA provisions for portable vouchers

PJs are amending written agreements and updating Consolidated Plan procedures to reflect the new rule on the staggered effective-date schedule. Confirm your PJ's current compliance posture before relying on any specific rule provision.

OBBBA impact

The One Big Beautiful Bill Act did not directly amend HOME. OBBBA's focus was on the tax code (LIHTC, OZ, NMTC), not appropriated programs. HOME continues to operate under its existing statute and the 2025 HOME Final Rule.

How to apply (developer's perspective)

HOME applications go to your local PJ, not to HUD. The application process varies by jurisdiction:

1. Identify the PJ. For most cities and counties, the PJ is the local Department of Housing or Community Development. For unincorporated areas, the state typically administers HOME funds.
2. Review the Consolidated Plan and Annual Action Plan. These documents identify the PJ's priorities, set-asides, and funding round timing.
3. Apply through the PJ's NOFA or application cycle. Most PJs run 1-3 funding rounds per year, often coordinated with LIHTC application cycles.
4. Negotiate a written agreement. Once selected, you'll execute a HOME Written Agreement specifying use, timing, affordability requirements, and reporting.
5. Close, build, comply. HOME funds typically draw at construction milestones (less commonly, all at closing). Compliance reports run annually for the affordability period.

Other program pairings

HOME stacks with most major federal affordable housing programs. Beyond LIHTC (above), the common combinations:

• HTF (National Housing Trust Fund): HOME for 50-80% AMI units; HTF for 30% AMI units. Common deep-affordability combination.
• CDBG: Predevelopment or infrastructure costs (which HOME cannot fund) funded by CDBG; HOME on the hard construction.
• FHLB AHP: AHP grant or subsidized advance as additional gap source; both programs have aligned compliance windows.
• Section 8 PBV/PBRA: Operating subsidy layer on top of HOME-funded affordable units to enable deeper affordability.
• Historic Tax Credit: HOME on the residential basis; HTC on the qualified rehabilitation expenditures.

Practitioner resources

• HUD HOME Program homepage and CPD notices
• 24 CFR Part 92 — the HOME implementing regulations
• HUD CPD's HOME Income Limits (updated annually with HUD Income Limits)
• HUD's HOME Per-Unit Subsidy Limits (updated periodically with 234-Condo limits)
• Your state HOME program (state HFA or state housing finance department)
• Your local Participating Jurisdiction's Consolidated Plan and Annual Action Plan
• Industry guides: NCSHA HOME resources, NAHRO publications, Novogradac HOME coverage