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
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.
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