HUD is proposing rules aimed at boosting the housing supply, supporting homeownership, and reducing the burden on states and local governments.
The U.S. Department of Housing and Urban Development (HUD) published a preview of a Notice of Proposed Rulemaking to modernize regulations for the HOME Investment Partnership Program (HOME), with publication in the Federal Register to follow soon. The proposed rule would streamline program requirements for states and localities, better align HOME funding with other federal housing resources, reduce administrative burden for communities and housing developers, improve assistance and protections for renters, strengthen the use of HOME for homeownership activities, and encourage green and climate resilient building practices. The HOME program is a critical tool to bolster housing supply and preserve existing affordable housing at a time of dire need. Through HOME funding, HUD advances the federal government’s goal of building 2 million units of housing.
What is the HOME Investment Partnership Program?
HOME is the largest Federal block grant to state and local governments for the creation of affordable housing for low-income households. 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 on a limited basis, provide tenant based rental assistance. HUD recently announced $1.3 billion for fiscal year 2024 to over 650 participating jurisdictions. This notice of proposed rulemaking is the first significant update to the regulations governing the HOME program in over a decade.
Highlights of the proposed rule update:
- Advance the federal government’s efforts to strengthen renter protections, including through its Blueprint for a Renters Bill of Rights and acceptable industry standards; creating a mandatory lease addendum with enhanced tenant protections, better define ‘good cause’ in the HOME program and reduce burdensome paperwork for tenants.
- Expand opportunities for nonprofit organizations and developers who use HOME funding to create and retain renter or homeowner activities in their neighborhoods. Simplify requirements for small-scale rental housing projects and better align HOME with Low-Income Housing Tax Credits. Provide incentives for green building and energy efficiency standards, which could result in lower utility and insurance costs for homeowners.
- 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 low-income renters, homeowners, and homebuyers.
- Reduce administrative burden by aligning utility allowances with other HUD programs, aligning inspection requirements with NSPIRE, reducing the frequency of income determination certification, and eliminating arduous waiting list requirements for small properties.
- Simplify requirements for homeownership activities. Addresses common challenges in homebuyer activities by extending sales deadlines for HOME-assisted units, adding flexibility for resale provisions, and allowing for rehabilitation of HOME-assisted properties after acquisition.
HUD seeks public comment on this proposed rule and invites all interested parties and members of the public to submit their views, comments, and recommendations for improvement for this proposal. Comments may be submitted electronically through http://www.regulations.gov, or through the methods described in the proposed rule.
