Grants to states, units of general local government, and insular areas to implement local housing strategies to increase affordable housing opportunities for low- and very low-income families. Nature of Program: Participating jurisdictions may use HOME funds for a variety of housing activities, depending on local housing needs. Eligible uses of funds include tenant-based rental assistance; housing rehabilitation; assistance to homebuyers; and new construction of housing. HOME funding may also be used for real property acquisition, site improvements, demolition, relocation, for both new construction and rehabilitation projects the costs to meet property standards, including accessibility requirements, and other necessary and reasonable activities related to the development of non-luxury housing. Funds may not be used for public housing development, public housing operating costs, or for Section 8 tenant-based assistance, nor may they be used to provide non-federal matching contributions for other federal programs, for operating subsidies for rental housing, or for activities under the Low-Income Housing Preservation Act.

All housing funded under the HOME program must serve low- and very low-income families. For rental housing, at least 90 percent of the families benefited each fiscal year must have incomes at or below 60 percent of the HUD-adjusted area median income; the remaining 10 percent of the families benefited each fiscal year must have incomes at or below 80 percent of area median income. Homeownership assistance must be to families with incomes at or below 80 percent of the area median income. Each year, HUD publishes the applicable HOME income limits by area, adjusted for family size.

HOME-assisted rental units must comply with certain rent limitations. Each year, HUD publishes the applicable HOME rent limits by area, adjusted for bedroom size. The program regulations establish maximum per-unit subsidy limits and maximum purchase-price limits. Also, the HOME regulations require participating jurisdictions to conduct independent underwriting and subsidy layering reviews before committing program funds to a project. HOME-assisted homebuyer and rental housing must remain affordable for a long-term affordability period, determined by the amount of per-unit HOME assistance or the nature of the activity. HOME-assisted homebuyer housing is also subject to resale or recapture requirements. Participating jurisdictions must provide a 25 percent match of their HOME funds. Participating jurisdictions must also set aside at least 15 percent of their allocations for housing to be owned, developed, or sponsored by eligible community-based nonprofit organizations designated as Community Housing Development Organizations.

Applicant Eligibility: States, local jurisdictions, insular areas, and consortia (contiguous units of local governments with a binding joint agreement).

Funding Distribution: HOME funds are allocated using a formula designed to reflect relative housing need. After Congress subtracts set-asides for insular areas, 40 percent of each appropriation is allocated to states, and 60 percent of the funds are allocated to units of general local government. States are automatically eligible for HOME funds, and receive either their formula allocation or $3 million, whichever is greater. Local jurisdictions eligible for at least $500,000 under the formula also can receive an allocation.

Communities that do not qualify for an individual allocation under the formula can join with one or more neighboring localities in a legally binding consortium whose members' combined allocation would meet the threshold for direct funding. Other localities may participate in HOME by applying for program funds made available by their state. Congress sets aside a pool of funding, equivalent to the greater of $750,000 or 0.2 percent of appropriated funds, which HUD distributes among insular areas.

Legal Authority: Title II of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701 et seq.).

Regulations are found at 24 CFR part 92.

Information Sources: HUD local field offices and state and local community development agencies.

On the Web: https://www.hud.gov/program_offices/comm_planning/affordablehousing/programs/home

Current Status: Active.