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 (42 U.S.C. § 12701 et seq.), 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. Unlike LIHTC (which only funds equity) or Section 8 (which only subsidizes operating costs), HOME can fund essentially any phase of the development life cycle — acquisition, predevelopment, new construction, rehabilitation, refinancing, or tenant-based rental assistance.

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 ranged from approximately $1.36B (FY2017 trough) to over $1.8B (FY2010 high), with FY2025 funded at roughly $1.5B. The FY2026 appropriation remains pending as of May 2026, with House and Senate versions both supporting continued program funding at similar levels.

The most significant recent regulatory update was HUD's final rule on HOME, published March 1, 2024 (effective April 30, 2024), which updated per-unit subsidy limits, modernized lead-based paint and environmental review provisions, clarified income determination procedures, and aligned several HOME provisions with HOTMA (Housing Opportunity Through Modernization Act). PJs had through 2025 to update their written agreements and policies to reflect the new rule.

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 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.

Income targeting and affordability

HOME rental funds must serve households at or below 80% of Area Median Income (AMI). Within that ceiling, HOME requires:

• At least 90% of HOME-assisted rental units must serve HOME-Low Income households (≤60% AMI) at the initial occupancy
• If a project contains 5+ HOME-assisted units, at least 20% must serve HOME-VLI households (≤50% AMI)
• HOME-LI rents are capped at 30% of 65% AMI; HOME-VLI rents are capped at the lesser of 30% of 50% AMI or fair market rent

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.

Pairing with LIHTC (the most common combination)

HOME and LIHTC are designed to work together. HOME's flexibility fills exactly the gap LIHTC cannot reach: deeper affordability tiers and capital-stack gaps in financially difficult deals.

Typical pairing patterns:

• HOME + 9% LIHTC: HOME as soft second mortgage filling the gap between hard debt + 9% equity and total development cost. HOME-LI units mapped to LIHTC 60% AMI units; HOME-VLI units mapped to LIHTC 50% (or deeper) units.
• HOME + 4% LIHTC + Bonds: HOME fills the deeper gap on 4% deals, which generate less equity per dollar of cost. Particularly common for preservation and acquisition/rehab.
• HOME + Income Averaging LIHTC: Post-2018, HOME-VLI 30%-40% AMI units can serve as the "deep" end of an income-averaged LIHTC building, with higher-AMI LIHTC units cross-subsidizing.

The compliance overlay is the strictest of both programs. LIHTC compliance periods (15+15 years) overlap and often exceed HOME's (typically 20 years for new construction). When restrictions diverge, the deeper restriction applies.

Recent regulatory and program changes

The HOME Final Rule (March 1, 2024)

HUD's most consequential HOME rule since 2013. 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 were required to amend written agreements and update Consolidated Plan procedures to reflect the new rule by year-end 2025.

OBBBA impact

The One Big Beautiful Bill Act (P.L. 119-21, enacted July 4, 2025) 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 2024 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.

Pairing with other federal programs

Beyond LIHTC, HOME stacks with:

• 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