HUD Streamlines and Modernizes Affordable Housing Regulations, Making Housing More Accessible for Families Nationwide

HUD No. 25-005 HUD Public Affairs (202) 708-0685

FOR RELEASE Wednesday January 8, 2025

WASHINGTON - Today, the U.S. Department of Housing and Urban Development (HUD) published a Final Rule in the Federal Register to modernize and strengthen regulations for the HOME Investment Partnership Program (HOME). HOME is the largest federal grant program specifically for creating housing for disadvantaged households. The regulatory updates, announced today, incorporate feedback from stakeholders, community leaders, and participating jurisdictions who receive annual HOME grant funding. The HOME final rule announced today streamlines program requirements for states and localities, better aligns HOME funding with other federal housing resources, reduces administrative burden for communities and housing developers, improves assistance and protections for renters, strengthens the use of HOME for homeownership activities, and encourages energy efficient and green building practices.

"These new rules build on HUD's commitment to reducing the red tape and making programs easier to use," said the Honorable Adrianne Todman, HUD Agency Head. "For more than 30 years, HOME has provided funding to build new homes, assist home buyers, and provide rental assistance. HOME funding plays a critical role in advancing housing opportunities for families across the country."

Since the creation of the program in 1992, more than 1.38 million homes have been completed through HOME funding. The HOME program is a critical tool to bolster housing production and preserve existing affordable housing at a time of dire need nationwide, and the regulatory improvements announced today will ensure funding is effectively and efficiently is deployed to boost housing supply and lower costs for families nationwide. Updates to the HOME regulations will strengthen the program for years to come. The final rule will:

• Reduce unnecessary burden on grantees and beneficiaries by streamlining income determinations;
• Simplify HOME rental housing requirements, making it easier to use HOME for small rental housing projects;
• Better align HOME with LIHTC and other federal funding;
• Simplifying tenant based rental assistance (TBRA) and making HOME TBRA work better for tenants, landlords, and participating jurisdictions;
• Strengthening tenants' rights and protections for occupants of HOME-assisted rental units and recipients of HOME tenant-based rental assistance;
• Modernize and simplify requirements for homeownership activities;
• Establish a new method for determining maximum per unit subsidy limits;
• Incentivize green building and energy efficient building practices to lower energy costs for families and save money for residents;
• Making HOME easier to use to increase the supply of housing by addressing pre-development costs; and,
• Expand availability and capacity of community developers by updating guidance for Community Housing Development Organizations and Community Land Trusts.

These updates will improve the ability of participating jurisdictions who receive HOME to implement funding more effectively and efficiently - making it easier for States and localities to use HOME to support renters, homeowners, and homebuyers. The rule will reduce administrative burden by aligning utility allowances with other HUD programs, reducing duplicative inspections by accepting NSPIRE performed for other funding sources, reducing administrative burden of performing income determinations by accepting determinations performed for other funding sources. The rule also incentivizes the use of HOME funds for small rental projects such as accessory dwelling units and duplexes by reducing the frequency of inspections and income determinations and eliminating arduous waiting list requirements for small properties.

Additionally, the rule will simplify requirements for homeownership activities. The update also addresses common challenges in homebuyer activities by extending sales deadlines for HOME-assisted units, adding clarity for resale provisions, and allowing for rehabilitation of HOME-assisted properties after acquisition.

The changes to HOME tenant-based rental assistance will support low-income renters by creating a mandatory lease addendum with enhanced tenant protections, better defining causes for eviction in the HOME program, and reducing burdensome paperwork for tenants.

"The final rule reflects insightful comments offered by multiple stakeholders, whether someone is the prospective resident of a new home, owner of an existing property renovated, with HOME dollars, a developer or operator of affordable rental housing, or a civil servant administering the grant program, these changes will simplify the use of grant funding," Principal Deputy Assistant Secretary for Community Planning and Development Marion McFadden. "I'm also pleased that new regulations will incentivize building energy efficient homes, resilient to weather related disasters."

The update will also expand opportunities for nonprofit organizations and developers to access HOME funding to create and retain renter or homeowner housing in their neighborhoods by revising requirements for community housing development organizations and community land trusts. It will also provide incentives for energy efficiency and green building standards, expected to result in lower utility and insurance costs for homeowners.

Under the HOME program, states, localities, and territories receive flexible block grants to provide down payment assistance and closing costs; build new housing to own or rent; rehabilitate existing housing; and provide tenant based rental assistance. HUD will host a stakeholder overview of the HOME Final rule on January 10, 2025. Further information regarding HOME, click here.