An Overview of the HOME Investment Partnerships Program

Katie Jones
Analyst in Housing Policy

The HOME Investment Partnerships Program was authorized by the Cranston-Gonzalez National Affordable Housing Act of 1990 (P.L. 101-625). HOME is a federal block grant program that provides funding to states and localities to be used exclusively for affordable housing activities to benefit low-income households.

Funds for HOME are appropriated annually to the Department of Housing and Urban Development (HUD), which in turn distributes funding to states and certain localities by formula. Sixty percent of HOME funds are allocated to localities, and 40% of HOME funds are allocated to states. The formula takes into account six factors, including the number of units in a jurisdiction that are substandard or unaffordable, the age of a jurisdiction’s housing, and the number of families living below the poverty line in the jurisdiction. States and localities that receive HOME funds are known as participating jurisdictions. As part of the process of becoming a participating jurisdiction, states and localities must submit a Consolidated Plan to HUD that identifies the community’s housing needs and describes in detail how HOME and other HUD block grant funds will be used to meet those needs. Participating jurisdictions can undertake projects themselves, or they can distribute funds to qualified organizations to undertake projects on their behalf.

HOME funds can be used to finance a wide variety of affordable housing activities that generally fall into four categories: rehabilitation of owner-occupied housing, assistance to home buyers, rental housing activities, and tenant-based rental assistance. Projects that use HOME funding must meet certain income targeting and affordability requirements. Specifically, all HOME funds must go to projects that benefit households with incomes at or below 80% of area median income, and 90% of the funds that are used for rental units or tenant-based rental assistance must benefit households with incomes at or below 60% of area median income. Additionally, all housing that uses HOME funds must remain affordable for a set period of time that varies according to the type of activity for which funds are used and the amount of HOME funding contributed to the project. Participating jurisdictions must also match the HOME funds they receive with their own 25% permanent contribution to affordable housing activities.

Funding for HOME fluctuated between $1.5 billion and $2 billion for several years before falling to $1 billion in FY2012. In FY2012, all 50 states and 592 localities received HOME formula grants, along with the District of Columbia, Puerto Rico, and four insular areas. The median state grant amount (including DC and Puerto Rico) was about $6 million, and the median locality grant amount was nearly $566,000. These were lower median grant amounts than in previous years, reflecting a lower level of funding for the program. Since the program’s inception, over half of HOME funding has been used for rental housing or tenant-based rental assistance. Furthermore, a larger percentage of HOME funding has been used for housing rehabilitation activities than for new construction or acquisition.


Date of Report: June 13, 2012
Number of Pages: 35
Order Number: R40118
Price: $29.95

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