HOME Investment Partnerships Program (HOME)

How It Works

Each year Congress appropriates money for HOME, and HUD distributes it by formula. By statute, after a small reserve for the insular areas, 60% goes to cities, urban counties, and consortia of smaller localities, and 40% goes to states. Governments that receive their own allocation are called participating jurisdictions (PJs). Smaller towns that do not qualify can apply to their state for a share.

The formula weighs measures of housing need, poverty, and the cost of producing housing. Before receiving funds, each PJ must file a Consolidated Plan with HUD that explains local housing needs and how it will spend HOME and other block grants.

PJs choose how to use the money. Eligible activities fall into a few broad groups:

• New construction or rehabilitation of rental housing
• New construction or rehabilitation of homes for owner-occupants
• Help for homebuyers, such as down payment or closing cost assistance
• Tenant-based rental assistance, a rent subsidy that follows the renter

In practice, HOME often works as gap financing: a loan or grant that fills the last hole in a project’s budget after tax credits, bank loans, and other sources. HOME projects regularly pair with the Low-Income Housing Tax Credit.

Two rules shape every allocation:

• Matching: PJs must contribute 25 cents of non-federal money for every HOME dollar they spend. The match is reduced or waived for fiscally distressed places and declared disaster areas.
• Nonprofit set-aside: PJs must reserve at least 15% of each allocation for housing owned, developed, or sponsored by Community Housing Development Organizations (CHDOs), which are community-based nonprofits. Since the 2026 reauthorization, reserved funds that are still unused after 24 months may go to other eligible activities.

Who It Serves

HOME rental housing and rental assistance must benefit households at or below 80% of area median income (AMI). The same limit applied to homeownership assistance until the 2026 reauthorization raised the statutory ceiling for that assistance to 100% of AMI.

Rental housing is targeted more deeply. At least 90% of families in HOME-assisted rental units, or receiving HOME rental assistance, must earn no more than 60% of AMI. In rental projects with five or more HOME units, at least 20% of those units must go to very low-income households, at or below 50% of AMI.

Rents, including utilities, are capped. “High HOME rents” are the lower of the area’s Fair Market Rent or a rent affordable to a household at 65% of AMI. “Low HOME rents,” which apply to the units set aside for very low-income households, are pegged to 50% of AMI.

Homes stay affordable for a set period. Newly built rental housing must remain affordable for at least 20 years. Rehabilitated or acquired rental housing carries a 5-, 10-, or 15-year period depending on how much HOME money each unit received. HUD’s 2025 HOME rule raised the dollar thresholds for those tiers.

How to Access It

Individuals do not apply to HUD. Renters apply to HOME-assisted properties or to a local rental-assistance program. Homebuyers apply to their city, county, or state housing office. Developers and nonprofits compete for funds through notices issued by their PJ or state. HUD posts current HOME income and rent limits on HUD User.

History

HOME was created by the Cranston-Gonzalez National Affordable Housing Act of 1990, part of a broader shift of federal housing decisions to states and localities. The first appropriation, in FY 1992, was $1.5 billion. Congress reauthorized the program in 1992, then funded it year to year for more than three decades without another reauthorization.

HUD published its first major rule update since 2013 in January 2025. Most provisions took effect April 20, 2025. Two pieces, new tenant protections and a higher subsidy cap for projects meeting green building standards, were postponed several times. On April 29, 2026, HUD delayed them indefinitely, and the next day it published a supplemental proposal to revise or revoke them.

On July 11, 2026, the 21st Century ROAD to Housing Act (Public Law 119-101) reauthorized HOME. It eliminated the 24-month deadline to commit funds, raised the statutory income limit for homeownership assistance from 80% to 100% of AMI, raised the purchase-price cap from 95% to 110% of the area median purchase price, and exempted several HOME activities from the procedural requirements of the National Environmental Policy Act. Some changes, including the environmental review provisions, require HUD rulemaking before they take full effect.

Limitations

• Funding is modest and uncertain. Appropriations generally ran between $1.5 billion and $2 billion a year from the late 1990s to FY 2011, then fell to $1 billion or less from FY 2012 to FY 2017. Congress provided $1.25 billion in each of FY 2024, FY 2025, and FY 2026. The administration’s FY 2026 and FY 2027 budgets both proposed eliminating HOME. Congress kept it for FY 2026, and in June 2026 the House Appropriations Committee approved an FY 2027 bill that would cut it to $500 million.
• It rarely works alone. Per-unit amounts are small relative to development costs, so HOME depends on other financing.
• Compliance is demanding. Long affordability periods, inspections, and federal cross-cutting rules add cost, especially for small projects.