Home Investment Partnerships (HOME)
The U.S. Department of Housing and Urban Development’s Home Investment Partnerships Program, known as the HOME Program, is a federal block grant that provides funding to state and local governments to develop affordable housing for low-income households. HOME funds can be used for housing within four basic program types: (1) homebuyer assistance; (2) rehabilitation for owner-occupants; (3) rental housing production; and (4) tenant-based rental assistance (TBRA).
The HOME Program is an excellent source of funds to acquire, rehabilitate, or construct transitional or permanent housing for individuals and families experiencing homeless or those at risk of homelessness. HOME funds may be used to cover all or most development costs. By using HOME funds in this way, private debt service can be eliminated or minimized, reducing rents far below market rent levels, leaving funds obtained through one of the homeless assistance programs to cover the ongoing costs of maintenance, management, and/or supportive services.
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 ($335,000 in years when Congress appropriates less than $1.5 billion for HOME) 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.
All low-income and extremely low-income individuals and families, including those who are homeless, can benefit from the HOME program. The eligibility of households for HOME assistance varies with the nature of the funded activity. For rental housing and rental assistance, at least 90 percent of benefiting families must have incomes that are no more than 60 percent of the HUD-adjusted area median income (AMI). In rental projects with five or more assisted units, at least 20 percent of the units must be occupied by families with incomes that do not exceed 50 percent of AMI.
Funds are automatically allocated to states and eligible local governments based on a formula weighing fiscal distress, poverty level, and supply of affordable housing stock. These funds are then used by governments for eligible program activities.
Shortly after HOME funds become available each year, HUD informs eligible jurisdictions of the amounts earmarked for them. Participating jurisdictions must have a current and approved Consolidated Plan, which will include an action plan that describes how the jurisdiction will use its HOME funds. A newly eligible jurisdiction also must formally notify HUD of its intent to participate in the program.